S&P 500 sees rare back-to-back gains of 25%, driven by technology and AI

From Nasdaq: 2024-12-18 04:26:00

The S&P 500 has seen back-to-back annual gains of 25% or more, a rare occurrence since 1957. Technology, particularly AI, is driving the index higher in 2024. History shows strong gains in 1999 after similar growth periods, but caution is advised due to current stretched valuations.

Nvidia is at the forefront of the AI revolution, with a projected $129 billion revenue for fiscal 2025. While the S&P 500’s P/E ratio is high at 27.9, historical trends show markets can remain expensive for extended periods. The Federal Reserve cutting interest rates and AI investments by tech giants could drive further stock market gains.

Potential political changes under the incoming Trump administration could introduce volatility in the stock market. Tariffs could lead to short-term market adjustments. Investors should consider long-term opportunities amidst any market fluctuations. The Motley Fool’s Stock Advisor service offers guidance on building a successful portfolio with high-return potential stocks.



Read more at Nasdaq: The Stock Market Is on Track to Do Something It Hasn’t Done Since the Dot-Com Bubble in 1998. Here’s What Might Happen Next.