The Dow ended the year up by about 13%, while the S&P 500 and the Nasdaq, which have more tech stocks, notched annual gains of over 23% and around 29% respectively.
Shares in Nvidia, which makes processors particularly adept at running AI models, including applications such as ChatGPT, rose more than 170% 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 United States 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 1000% since then, the Magnificent Seven nearly 100% 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.
In Europe, records also fell, but the gains were less marked.
Frankfurt’s DAX, driven by business software developer SAP (+70%) broke the 20,000-point level and finished the year with a gain of 18.9%.
Tokyo’s Nikkei 225 index gained almost 20% in 2024, finally surpassing the high seen before Japan’s asset bubble burst in the 1990s.
A very political year
Donald Trump’s victory in the US presidential election gave Wall Street even more of a boost based on expectations he will follow through on pledges of deregulation and tax cuts.
“The market considered that will mean more growth and for longer,” said Pierre Bismuth, director at Myria Asset Management.
Political developments did not always aid investors, however. In France, 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 6% ahead of the election, ended 2024 down more than 2%.
Weakness in China further dragged down luxury stocks.
In 2025, investors are wary of Trump implementing threatened tariff hikes, and the outcome of early elections in Germany in February.
Bitcoin, gold and commodities
Bitcoin rode expectations of deregulation under Trump to break the US$100,000 ($176,960) level and rose more than 120%. Ethereum rose more than 40%, even if it did not set a new all-time record.
Gold also set a new record as it benefitted 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.
Monetary policy roller coaster
The central banks of the US and some European countries finally began to cut interest rates they had hiked to tame an inflation spike triggered by the post-pandemic recovery and the Russian invasion of Ukraine.
Switzerland got the ball rolling in March, followed by the European Central Bank in June, and the Bank of England and the US Federal Reserve in September.
Investors as well as central banks were anxious about the pace of interest rate cuts: not too fast to reignite inflation but not so slow that activity falls.
Trading sometimes turned volatile as investors interpreted economic data through the prism of its impact on the Fed’s likelihood to cut rates.
In August, investors took fright from disappointing US jobs figures, causing a nearly 3% slump on Wall Street as they feared the economy might be on the brink of a recession.
However, the US economy proved resilient, and investors and the Fed have been paring back expectations of further rate cuts, especially as Trump’s tariffs could spark fresh inflationary pressures.
Given stagnant growth in the eurozone, the ECB is expected to continue cutting rates.
