in 2025 after two years of over 20% expansion in the benchmark index, according to BTIG analysts led by Jonathan Krinsky. Despite a somewhat dour ending to 2024, the main US indices all logged double-digit annual increases, with the S&P 500 in particular notching its best two-year performance since 1997-1998. Much of the optimism was bolstered by the Federal Reserve's decision to beginning slashing interest rates down from multi-year highs.
Policymakers have pointed with optimism to a waning in inflationary pressures since a peak in 2022, although some have flagged that this easing has cooled in recent months. Fed Chair Jerome Powell said at a press conference last month that while policy is in a'good place,' the central bank will now take a more'cautious' approach to further reductions. Incoming President Donald Trump's administration, plus a slew of victories for other Republican candidates in November's crucial elections, have also boosted hopes that companies will benefit from a new era of looser regulations and tax cuts. Still, uncertainty continues to cloud over Trump's plans to roll out both stringent tariffs as well as sweeping deportations -- and whether these moves may rekindle inflation. Elsewhere, a surge of interest around artificial intelligence has sparked a jump in several stocks exposed to the nascent technology. Nvidia (NASDAQ:) emerged as the largest global gainer in terms of market capitalization in 2024, thanks in large part to soaring demand for its AI-focused chips across a range of industries. The company added more than $2 trillion in market value in 2024, closing out the year at $3.28 trillion, giving it the second-highest valuation among the world's listed firms. BTIG's Krinsky noted that while equity markets in the first half of 2024 were fueled mostly by the surge in mega-cap names like Nvidia, many investors had expected the breadth of these gains to broaden once the Fed started to cut rate
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