NEW YORK — The year 2024 is proving to be remarkable for investors, with U.S. stock markets achieving significant gains and the S&P 500 Index setting new records. The ongoing economic growth and the Federal Reserve’s decision to lower interest rates have contributed to this surge.
Prominent companies in the technology sector, often referred to as Big Tech, continued to dominate the market, with stocks of giants like Apple and Nvidia reaching new heights. However, this year was not limited to tech; alternative investments, including Bitcoin and gold, also saw substantial increases. Below are some key statistics that characterized the year, as of December 20th.
In terms of performance, the S&P 500 is on the verge of achieving a much-celebrated milestone — marking the first time since 1998 that the U.S. stock market closes out two consecutive years with a gain exceeding 20%. Thus far, the index has gained 24.3% this year, building on last year’s impressive 24.2% rise.
The index has set an incredible 57 record highs throughout 2024, beginning with the initial peak on January 19th. This marked the end of a prolonged recovery from the downturn induced by high inflation and fears that the Fed’s interest rate hikes would trigger a recession. Incremental gains continued, with record highs being achieved consistently each month, except for April and August, with the latest peak recorded on December 6th.
The Federal Reserve has implemented three interest rate cuts this year, retreating from a previously established two-decade high. These cuts have eased pressure on the economy and propelled stock market optimism. Market predictions regarding rate cuts were initially much more aggressive, with traders anticipating reductions totaling 1.5 percentage points for 2024. However, in December, the Fed tempered expectations, suggesting only two additional cuts could occur in 2025.
Following Election Day, the Dow Jones Industrial Average rose 1,508 points as investors speculated about the implications of Donald Trump’s potential return to the presidency on both the economy and global affairs. The S&P 500 registered its most impressive day in nearly two years, surging 2.5%. While bank stocks and other smaller firms also saw gains, this initial excitement has waned due to concerns that Trump’s policies might escalate inflation.
Bitcoin broke the $100,000 threshold this past month, achieving a record high above $108,000. This rise is linked to decreasing interest rates and a surge in interest following Trump’s election. His newfound support for cryptocurrency and the appointment of a perceived crypto-friendly individual as chair of the Securities and Exchange Commission have further fueled Bitcoin’s ascent from just $17,000 two years ago, which followed the collapse of crypto exchange FTX.
Gold has also enjoyed a significant rise of 26.7% year-on-year, thanks to global conflicts that heightened demand for secure investments. Additionally, the Fed’s interest rate cuts have positively impacted gold, as lower bond interest rates make gold, which offers no interest payments, a more attractive option.
Meanwhile, Tesla’s stock climbed past the notable $420 mark in December. The number holds particular significance for Elon Musk, who notoriously claimed in 2018 that he had secured funding to take Tesla private at that price. Tesla’s stock has more than doubled from under $250 at the beginning of the year, partly due to optimism regarding the potential impact of Musk’s relationship with Trump on the company’s future.
Nvidia has seen unprecedented revenue growth, reporting $91.2 billion for the nine months ending October 27. This surge is attributed to the prevailing enthusiasm surrounding artificial intelligence, with Nvidia’s chips leading the charge in AI innovations, significantly boosting its valuation beyond $3 trillion.
On May 13, GameStop’s stock surged by 74% following an online appearance by Keith Gill, known as “Roaring Kitty.” His endorsement played a critical role during the meme stock phenomenon in 2021, and his return ignited a rally for other meme stocks like AMC Entertainment. Gill later revealed a significant stake in Chewy but sold all shares by late October.
In the broader economic context, the U.S. economy exhibited impressive growth rates of 1.6%, 3.0%, and 3.1% in the first three quarters. This defied earlier pessimistic forecasts made while inflation was peaking at over 9% in the summer of 2022. Households with lower incomes are still grappling with high costs; however, the economy as a whole has shown remarkable resilience.
The vacancy rate for U.S. office buildings reached an all-time high of 20.1% during the first three quarters of 2024, as reported by Moody’s. The relative stability of this rate is viewed as a positive outcome for office building landlords, particularly as it rose persistently from 16.8% in late 2019. Post-pandemic trends towards remote work have reduced the demand for physical office space.
Finally, through the first eleven months of 2024, 3.73 million previously occupied homes were sold across the nation. To match 2023’s total of 4.09 million existing homes sold — the lowest in nearly three decades — December sales would have to accelerate by 20% year-over-year. Since mortgage rates surged from their pandemic lows in 2022, the U.S. housing market has been in a slump, with persistent home shortages and high mortgage rates deterring potential buyers.
