U.S. stock indices saw declines in the final trading session of the year, with the yield on ten-year Treasury bonds rising, but they still achieved annual gains for the second consecutive year, supported by optimism about the end of the tightening monetary cycle and the AI boom.
The U.S. indices closed with strong annual gains, led by the Nasdaq, which surged by over 28%. The S&P 500 rose by 23%, marking a gain of more than 20% for the second consecutive year, and the first time since 1998.
The Dow Jones posted the smallest annual gain among the indices, with a rise of about 13%.
The S&P 500 recorded approximately 57 record closes in 2024, the highest number since 2017. The index has been in a bull market for two years, supported by significant gains in tech stocks, particularly Nvidia, along with a rebound in small U.S. companies. The Russell 2000 index rose by 12% this year, and the gains were not limited to the "Magnificent Seven" companies.
The momentum for 2025 is expected to continue, according to several investment institutions. Earnings growth for S&P 500 companies is projected to reach 15% next year, paving the way for further gains, according to FactSet.
As for the key targets set by financial institutions for the S&P 500, Oppenheimer has a target of 7100 points, Wells Fargo expects around 7007 points, and Deutsche Bank predicts the index will reach 7000 points.
Evercore ISI forecasts the index will hit 6800 points, while HSBC expects it to reach 6700. JPMorgan and Citi predict the index will hit 6500 points, while UBS expects the index to rise to 6400 points.
