How the Stock Market Defied Expectations in 2024

2024 has turned out to be an exceptional year for investors.

U.S. stocks have surged, propelling the S&P 500 to new record highs, thanks to continuous economic growth and the Federal Reserve starting to cut interest rates.

This year featured several familiar champions, especially within Big Tech, whose stock prices have continued to skyrocket. However, it wasn't just tech stocks that thrived; other investments like Bitcoin and gold also saw significant increases.

Market Performance

As of December 20, 2024, the S&P 500 has risen by 24.3%, not including dividends, following a notable gain of 24.2% the previous year. This marks the first time since 1998 that the U.S. stock market is set to close out two consecutive years with an increase of 20% or more.

Record Achievements

This year, the S&P 500 reached a total of 57 all-time highs, marking a steady climb since the initial surge on January 19. The index rebounded from a previous decline caused by high inflation and concerns over high interest rates, which led to fears of a recession.

Interest Rate Cuts

The Federal Reserve made three cuts to its principal interest rate this year, providing much-needed relief to the economy. Expectations for these rate reductions, along with the anticipation of more in 2025, have significantly contributed to the stock market's success.

Post-Election Market Reaction

After the recent election, the Dow Jones Industrial Average rose by 1,508 points the day after Election Day. This surge was fueled by investors speculating on the potential implications of Donald Trump's return to the White House. The S&P 500 experienced its best day in nearly two years, gaining 2.5%.

Bitcoin's Surge

Bitcoin reached a record high above $108,000 this year, benefiting from decreasing interest rates and increased support from Elon Musk. The cryptocurrency's journey has been remarkable; just two years ago, it hovered around $17,000 following the collapse of a major exchange.

Gold’s Performance

Gold also had an impressive year, climbing 26.7%. Global conflicts and the reduction in interest rates led to a surge in demand for safe-haven investments like gold.

Tesla and AI Growth

Tesla's stock surpassed $420 in December, driven by positive expectations regarding Trump’s presidency. Meanwhile, Nvidia reported $91.2 billion in revenue over nine months, highlighting the financial boom triggered by the artificial intelligence sector.

Meme Stock Revivals

One notable event involved a 74% spike in GameStop’s stock after social media influencer Keith Gill reappeared to boost the company. Other meme stocks, like AMC Entertainment, also benefited from this resurgence.

Economic Growth

The U.S. economy recorded remarkable growth rates of 1.6%, 3.0%, and 3.1% in the first three quarters, defying skeptics who predicted a recession amid high inflation rates.

Office Vacancy Rates

The vacancy rate for U.S. office buildings reached an unprecedented 20.1% in the first three quarters of 2024. Despite the historical highs, the rate remained stable for most of the year, a positive trend for property owners.

Housing Market Trends

Sales in the housing market faced challenges, with only 3.73 million previously occupied homes sold through November. This year has seen a slump due to high mortgage rates and a shortage of available homes.

stocks, economy, growth