Welcome to the Jungle
Overview
US equities extended their impressive run in 2024, with the S&P 500 advancing 25%, building on the 26% gain in 2023. The index reached record highs, surpassing its January 2022 peak by 23% and the March 2020 COVID-19 low by a remarkable 163% (see Figure 1).
For the second consecutive year, the Artificial Intelligence (AI) revolution and the remarkable performance of the Magnificent Seven drove US markets in 2024, allowing the US to continue outperforming the rest of the world.
On January 27th, AI-related stocks experienced a sharp downdraft as Chinese innovator DeepSeek introduced an AI platform it claims is better, cheaper, and faster than existing platforms. As additional details emerged, the shares of Semiconductor, Nuclear, and Utilities companies and their suppliers rebounded. This volatility is a reminder that AI technology is advancing rapidly, disruptors will continue to emerge, and we remain vigilant.
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