Key Points
The S&P 500 is projected to finish 2025 with gains exceeding 10% for the third consecutive year, having increased by 16% through December 15. This marks only the third instance since 1952 that the index has achieved three straight years of double-digit gains, the last two being in 2012-2014 and 2019-2021.
Since the end of 2022, the S&P 500 has surged by 77.5%. Notably, the index recorded a 24.2% gain in 2023 and a 23.3% gain in 2024. Historically, these streaks have varied in follow-up performance, with declines in two previous occasions the year after such gains.
The current surge is largely attributed to advancements in AI, with Nvidia’s market capitalization nearing $5 trillion, reflecting a tenfold increase due to the AI boom. Continued investor interest will depend on future Fed policies, economic strength, and sustainability of AI demand.
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