S&P 500 Sets More Than 50 New Highs in 2024 [VIDEO]

The past two years have been remarkable for stocks, as the S&P 500 is on its way to posting back-to-back gains of more than 20% with just a handful of days left in the year.

The chart below takes a closer look at 2024’s price movement and uses yellow shading to mark the days when the index closed at an all-time high: 

At the start of this year, the S&P 500’s previous all-time high was set in January 2022. It took over two years to reclaim the prior high, but once the index broke through in late January it went on to set more than 50 new highs over the course of the year.

These all-time highs illustrate the current bull market’s strength and persistence. Tech stocks, such as Nvidia, Meta, Amazon, and Tesla, have posted strong returns and played a major role in driving the index’s gains. The S&P 500’s record-setting performance is part of a broader rally that has lifted stocks and other assets.

The stock market’s climb this year speaks to investors’ growing confidence. Investors are optimistic about artificial intelligence and its growth potential. Additionally, the economy outperformed expectations in the 2nd and 3rd quarters, despite high interest rates. After the November election, the stock market rally intensified as investors focused on the incoming administration’s agenda. Expectations for tax cuts, deregulation, and energy production are fueling hopes for stronger economic growth.

The question is whether the momentum can continue in 2025.  The Fed’s recent policy meeting has created volatility in the equity markets, but the S&P 500 still trades at over 21x its next 12-month earnings estimate - a level not seen outside of periods like the tech boom of the late 1990s and the post-COVID recovery. 

Investors have shown a willingness to pay higher multiples, but with valuations stretched, earnings could play an important role in determining the stock market’s next move. The current bull market, which started in October 2022, is now in its third year, and the focus is likely to shift to fundamentals as the bull market matures. 2025 is expected to be a year where companies will need to deliver on investors’ expectations to justify their high valuations. 

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