Investors will ring in the New Year with the S&P 500 just shy of an all-time high, rising 24% to close out 2023.
This is the largest one-year point and percentage gain for the broadest measure of U.S. stocks since 2021, as tracked by Dow Jones Market Data Group, and investors say there is more to come in 2024.
"History tells us good years tend to follow great years. The average is about 10% vs. a more normal 7% when you follow an up-year," CFRA Chief Investment Strategist Sam Stovall told FOX Business.
FINANCIAL RESOLUTIONS FOR 2024
A potential tailwind for U.S. equities in 2024 — the forthcoming presidential election.
"In a presidential year, the average return for the S&P 500 is about 11.28% since 1928, so that means the ‘Magnificent Seven’ or the large caps are going to do less well next year than they did this year, and the opportunity is going to be in small and mid-caps," said Great Hill Capital Chairman Thomas Hayes during an interview with FOX Business.
The "Magnificent Seven" that Hayes noted includes Apple, Microsoft, Google, Amazon, Meta, Tesla and Nvidia.
The chipmaker Nvidia, riding demand for AI, gained over 238% in 2023 as one of the S&P's best performers.
These stocks helped information tech rise a whopping 57% during the year, making the group the S&P's best performing sector. Communication and consumer discretionary stocks also had their best years on record, rising 55% and 42%, respectively, as tracked by Dow Jones Market Data Group.
Menawhile, defensive utilities, consumer staples and energy stocks posted declines as the year's bottom performers.
Not to be outdone, the Dow Jones Industrial Average is also sitting at an all-time high, registering its 7th record close on Thursday, with annual gains of 13.7%.
The Dow 30 hit an all-time high in December after the Federal Reserve signaled policymakers are readying three potential rate cuts in 2024, with the first potentially coming in March. However, Chairman Jerome Powell did temper the outlook with the possibility the Fed could reverse should the data warrant.
WILL THE FED CUT RATES IN 2024? EXPERTS WEIGH IN
For the tech-heavy composite, it's up over 43% this year, but remains about 6% below its record close of 16,057 reached in November 2021.
