The Vintage Year for US Stock Markets That Few People Expected
A year ago, equity investors and strategists braced for a potential turbulent 2024, worrying about the risk of a hard landing for the US economy and interest rates cuts that could come too late to prevent it.
Fast forward to now: 2024 is set to enter Wall Street’s hall of fame of bull years.
Heading into the year, few anticipated that the S&P 500 Index’s annual gain would be among the best in history. Not many expected another blistering rally fueled by a handful of tech titans and a market sentiment so bullish that one risk event after another got cleared without a scratch.
In late 2023, a slowdown was the central scenario for a lot of economists and inflation was still a major concern, blurring the path for monetary policy and the outlook for corporate profits. But interest rates have come down, growth is still robust and earnings are rising, pushing the market higher and volatility has remained subdued despite a flurry of risk events.
The yearly performance of the Nasdaq 100 and the S&P 500 is closer than it was historically, with both benchmarks up more than 20%. Artificial intelligence poster child Nvidia Corp. tripled once again in 2024, and all things technology followed in its wake.
Following an already great 2023, not a lot of market participants would have thought that this year could see a repeat. “There has been an extraordinary equity run – particularly in the US,” said William Davies, global chief investment officer at Columbia Threadneedle Investments. “Economic growth in the US has been solid and inflation has steadily decreased.”
