The S&P 500 is on track to close 2024 with a gain of nearly 27% after setting 50 record highs this year, the Associated Press reports. That’s on top of its 24.2% spurt the year before, a spectacular two-year run unmatched since the dot-com boom.
This time around, skyrocketing prices for companies in the artificial intelligence business are boosting the market. Nvidia, for example, has more than doubled in value after surging over three times in 2023 because its chips are powering much of the move into AI. Super Micro Computer, which makes servers used in AI and other computing, has jumped nearly 48% this year after more than tripling last year.
The economy, meanwhile, isn’t far removed from its last recession, which struck with the COVID-19 pandemic, but so far it has avoided a recession that many on Wall Street worried was inevitable after the Federal Reserve hiked its main interest rate to a two-decade high in hopes of slowing the economy to beat high inflation.
After that two-year dot-com run in 1998, the stock market rose again in 1999, by 19.5%, as the economy kept growing, and the dot-com bubble inflated. Many voices on Wall Street say the stock market could keep rising in 2025 too, though likely not to the same degree.
Similar winning streaks have also come to a sudden end in the past, however, like after 1999. The S&P 500 ended up peaking in early 2000 before falling for several years as the dot-com bubble deflated and the economy fell into its 2001 recession.
