Stock futures showed little change in overnight trading on Tuesday as the market gears up for the new year after an unexpectedly strong 2023 that saw the S&P 500 surge by 24%. Dow Jones Industrial Average futures increased by a modest 23 points, S&P 500 futures rose slightly, and Nasdaq 100 futures hovered around the same level. Markets were closed on New Year’s Day.
The stock market concluded 2023 on a high note, with the S&P 500 rising for nine consecutive weeks, marking its best winning streak since 2004. This robust performance was fueled by a relief rally in risk assets, driven by a resilient economy, easing inflation, and signals from the Federal Reserve about a pause in rate hikes. Despite challenges such as a regional banking crisis and conflicts in Ukraine and the Middle East, the market demonstrated resilience.
In 2023, technology shares, particularly large-cap stocks like Apple (up 48%), Microsoft (up nearly 57%), and Nvidia (up 239%), led the way. The Nasdaq Composite, heavily weighted towards technology, achieved a remarkable 43.4% gain, its best performance since 2020. The Dow Jones Industrial Average, composed of blue-chip stocks, recorded a 13.7% gain, reaching a new record.
Following the outstanding performance of 2023, Wall Street strategists are predicting more modest returns for stocks in the new year. According to the CNBC PRO exclusive Market Strategist Survey, the top 14 strategists anticipate the S&P 500 to finish 2024 at 4,881, just 2.3% above the closing value on Friday, which was 4,769.83.
Some experts caution about potential challenges in the coming year, including a weaker economy and subdued consumer spending, which could result in slower earnings growth for Corporate America. Adam Crisafulli, founder of Vital Knowledge, highlighted the risk of a larger-than-expected decline in earnings per share amid a backdrop of cooler growth and diminishing pricing power.
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