The US stock market welcomes another "harvest year," continuously defying Wall Street elites for two consecutive years! This time, they are rushing to join the bullish camp

A year ago at this time, global stock investors and top Wall Street strategists were preparing for potential significant turmoil in the U.S. stock market in 2024. They were very concerned about the possibility of a "hard landing" for the U.S. economy and that the timing of the Federal Reserve's interest rate cuts might come too late, or even not at all in 2024.

Fast forward to now: the U.S. stock market unexpectedly continues its "bull market trajectory" in 2024, and this year is destined to enter the "Wall Street Bull Market Hall of Fame."

At this time last year, few Wall Street analysts expected the Nasdaq 100 Index and the S&P 500 Index to both rise over 20% so far in 2024, as global geopolitical and other risk events failed to hinder the explosive upward trend of the U.S. stock market.

Notably, in 2023, the U.S. stock market entered a bull market with an epic rebound fueled by the global enthusiasm for AI, shattering Wall Street's expectations during the year-end stock market review—none of the investment institutions on Wall Street had anticipated the bull market in U.S. stocks in 2023. In 2024, Wall Street was once again "slapped in the face" by the strong upward momentum of U.S. stocks, proving that even the top stock market strategists in the world could not accurately predict this stock market that attracts global capital.

The U.S. stock market is destined to enter the Bull Market Hall of Fame in 2024—the S&P 500 Index's gains rank among the best of the century

As the new year begins, few anticipated that after experiencing a bull market in 2023, the annual gain of the U.S. stock market benchmark—the S&P 500 Index—would rank among the "best in history." Not many investors expected that, driven by a few tech giants, market sentiment would be so optimistic that the U.S. stock market would seamlessly navigate one pessimistic risk event after another, repeatedly hitting historical highs after these events.

The U.S. stock market's upward momentum in 2024 is strong, with no "corrections exceeding 10%" throughout the year

At the end of 2023, economic slowdown became a major prediction for many economists, and high inflation remained a focal point, making the direction of monetary policy and corporate profit forecasts very unclear, even leaning towards pessimism. This was the core logic behind Wall Street's lack of optimism for the U.S. stock market's upward trend in 2024.

However, so far in 2024, these doubts have been completely shattered. The benchmark interest rate has significantly decreased, U.S. economic growth remains strong, corporate profits continue to rise, and stock buybacks by listed companies have reached new highs. These factors have collectively driven the U.S. stock market to repeatedly hit historical highs. Despite a series of severe risk events, market volatility has remained at historically low levels.

The annual performance of the Nasdaq 100 Index, which covers all popular tech stocks, and the S&P 500 Index, the benchmark for the U.S. stock market, is now much closer to each other compared to historical average gains, indicating that the hottest AI concept stocks, tech stocks, and cyclical stocks are collectively rising in 2024, no longer just the "one-horse show" of AI concept stocks in 2023 Both benchmark indices have risen by more than 20%, breaking Wall Street's skepticism.

The most representative giant in artificial intelligence—NVIDIA (NVDA.US) has surged 240% in 2023 and has achieved a 175% increase so far in 2024. Other tech giants and Nasdaq 100 constituents have also shown very strong growth.

"It must be acknowledged that after a good performance in 2023, not many market participants expect this kind of frenzied growth to be repeated this year. The stock market is performing exceptionally well, especially in the United States," said William Davis, Global Chief Investment Officer at Columbia Threadneedle Investments. "The U.S. economy is growing steadily, and inflation is gradually declining."

So far in 2024, the U.S. stock market has experienced mild volatility, with only one significant correction: the summer sell-off, which ultimately triggered a sharp sell-off around August. However, the decline lasted less than a month and failed to break through the "10% threshold," which is typically seen as a technical adjustment.

This year's largest decline was both shallow and short—European and American stock markets did not fall below the correction threshold.

Despite geopolitical tensions being a significant threat, there has been no escalation of armed conflict in the Middle East, and the Russia-Ukraine conflict has not spread across the European continent as some analysts had expected. The U.S. presidential election has not triggered any deep-seated concerns about social security. China has released a series of stimulus measures sufficient to maintain the logic of healthy global economic growth.

The overall performance of European stock markets has also been quite impressive. Despite an unstable economic outlook and the French and German governments facing collapse, most countries in the region have seen their benchmark indices rise significantly this year.

However, the rise in the U.S. stock market has been so strong that the European stock benchmark—the Stoxx 600 index—is expected to have its worst year compared to the S&P 500 index. Due to ongoing political turmoil, the French stock market is one of the few underperforming stock markets among developed markets in 2024.

Wall Street has been proven wrong for two consecutive years; can we trust their predictions this time?

As the new year approaches, the atmosphere of predictions on Wall Street leans towards optimism, with almost no investment institutions expecting a significant adjustment. Those investment institutions that stock investors can name are very optimistic in their "bullish reports" for the U.S. stock market in 2024. However, due to Wall Street elites' consecutive prediction failures over the past two years, and the U.S. stock market entering the next year at historical highs and high valuations, combined with a significant cooling of expectations for Federal Reserve interest rate cuts, The market is slightly skeptical about whether the U.S. stock market can achieve outstanding gains for three consecutive years.

Since the beginning of this year, the S&P 500 index has surged over 25%, poised to achieve a return rate of over 20% for the second consecutive year—something that has only occurred four times in the past 100 years. Deutsche Bank predicts that the benchmark U.S. stock index—the S&P 500—could reach 7,000 points by the end of next year, compared to the index closing at 5,998 points on Wednesday. This makes Deutsche Bank the most optimistic among many Wall Street investment institutions predicting further gains in the U.S. stock market. Deutsche Bank forecasts that companies will repurchase $1.3 trillion of their own shares from investors, up from $1.1 trillion this year.

Currently, the average forecast from Wall Street investment institutions is as high as 6,400 points, and JPMorgan, which has been bearish on U.S. stocks for a long time, has also turned optimistic. The team led by Chief Global Equity Strategist Dubravko Lakos-Bujas predicts that the S&P 500 index will reach 6,500 points by the end of 2025. The institution expects favorable factors such as a healthy U.S. labor market, interest rate cuts, and a surge in capital expenditures as companies compete for leadership in artificial intelligence technology to stimulate continued upward movement in U.S. stocks.

Additionally, UBS and Morgan Stanley both expect the S&P 500 index to reach 6,500 points next year, while predictions from Goldman Sachs, Barclays, and Bank of America are around 6,600 points.

Davis stated, "The earnings growth forecast for the U.S. stock market in 2025 remains very optimistic, with an expected increase of about 15%. This sustained performance resilience is somewhat surprising, as we enter 2025 with the global economy not without risks."