S&P 500's Record Gains in 2024 Signal Caution for 2025

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Dec 04, 2024

Ned Davis Research strategists warn that the record-breaking rally in U.S. stocks this year suggests investors should be cautious. The S&P 500 Index has reached 54 record high closes in 2024, driven by factors like Federal Reserve rate cuts and the AI boom. Historically, a year full of new records often leads to weaker market performance the following year. Since 1928, years with over 35 record highs saw a median return of 5.8% the next year, below the 8% long-term average. When there were at least 50 highs, the median return was -6%. Analysts note the market's narrow breadth could challenge 2025's outlook, despite optimistic Wall Street forecasts.

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