Insane stock market surge not seen in 30 years

The stock market is set to pull off an incredible feat which hasn’t been done since 1998.

The stock market is expected to grow by a whopping 20 per cent for the second consecutive year, something which hasn’t been pulled off since last millennium.

2024 was an insanely good year for investors and 2025 is set to be on par, marking a significant feat.

Wall Street’s three main stock indices blew past record highs to set new peaks in 2024, with the Dow Jones Industrial Average climbing above 45,000 points, the S & P 500 above 6,000 and the Nasdaq Composite above 20,000.

The Dow ended the year up by around 13 per cent, while the S & P 500 and the Nasdaq, which have more tech stocks, notched annual gains of over 23 per cent and around 29 per cent respectively.

And now experts predict that the S & P 500 is right on track to surge over the 20 per cent mark this year.

Not since the 1997 and 1998 dot com boom has there been back-to-back rallies over that threshold, according to financial analysis firm Factset.

And it’s only happened three other times since records began for the stock market — in 1927 and 1928, 1935 and 1936, and in 1954 and 1955.

The S & P had a phenomenal year and it’s expected to repeat its results this coming year.

And while it might seem like a strange time for stocks to be hitting records highs — in the midst of political turmoil all over the world and the cost of living crisis — it actually has proven to be fertile ground for stocks to grow and thrive.

Stock markets and bitcoin smashed records in 2024, fuelled by investor enthusiasm for Artificial Intelligence (AI), falling interest rates, and the Donald Trump effect.

“It was an exceptional year, driven by the performance of tech shares thanks to artificial intelligence,” Christopher Dembik, senior investment adviser at Pictet Asset Management, told AFP.

Shares in Nvidia, which makes processors particularly adept at running AI models, including applications such as ChatGPT, rose more than 170 per cent in 2024.

“It’s now been about two years that ChatGPT was launched and it’s been two years that the AI buzz pushed some US Big Tech companies to the sky,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

“Nvidia, which has become the icon of the AI rally, gained almost 1,000 per cent since then, the Magnificent Seven nearly 100 per cent since last November,” she added.

The Magnificent Seven are seven companies widely recognised for their technological and consumer impact: Alphabet (Google), Amazon, Apple, Meta (Facebook), Microsoft, Nvidia and Tesla.

Donald Trump’s election win buoyed the stock market. Picture: Kamil Krzaczynski/AFP

At the same time, Donald Trump’s victory in the US presidential election gave Wall Street even more of a boost on hopes he will follow through on pledges of deregulation and tax cuts.

Bitcoin rode expectations of deregulation under Trump to break the $100,000 level and rose more than 120 per cent. Ethereum rose more than 40 per cent, even if it did not set a new all-time record.

In 2025, investors are keeping a wary eye to see if Donald Trump implements threatened tariff hikes, as well as the outcome of early elections in Germany in February.

How Australia’s ASX 200 did — not too shabby.

Globally, a lot of stock markets have been doing well.

Frankfurt’s DAX, driven by business software developer SAP (+70 percent), and finished the year with a gain of 18.9 per cent.

Tokyo’s Nikkei 225 index gained almost 20 per cent in 2024, finally surpassing the high seen before Japan’s asset bubble burst in the 1990s.

Australia’s ASX made gains, albeit more modest ones. We finished the year about 7.5 per cent higher than the year before.

Gold also set a new record as it benefited from its safe-haven appeal during times of geopolitical tensions.

Commodities such as coffee and cocoa set new records as poor weather caused supply concerns.

A few other nations didn’t enjoy stock market gains quite as much.

President Emmanuel Macron’s calling of early parliamentary elections backfired with no clear winner, and the Paris CAC 40, which had been up more than six per cent ahead of the election, ended 2024 down more than two per cent.

Weakness in China further dragged down luxury stocks.