The U.S. stock market is off to a strong start in 2024 thanks to confidence about the economy, interest rate decreases, and artificial intelligence company opportunities.
The S&P 500 (.SPX) has gained almost 10% this year, its highest first-quarter increase since 2019. After a spike in late 2023, the benchmark index struck its first record high in two years in late January and has since set more than a dozen highs without a substantial drop in 2024.
According to BofA Global Research's March monthly survey, nearly two-thirds of fund managers expected a gentle landing for the economy in the coming year, while 11% predicted a "hard landing".
Many investors were pleased by a dovish Federal Reserve meeting this month, in which the central bank maintained its expectation of three interest rate reduction this year while boosting its economic outlook.
Nvidia (NVDA.O), opens new tab, has risen over 80% this year on its AI processors. Meta Platforms (META.O), opens new tab, rose 37% this year after Facebook issued its first payout in February.
Some megacaps have underperformed. Apple (AAPL.O), opens new tab shares have fallen 11% due to antitrust regulators and China commercial pressure. Tesla (TSLA.O) fell 29% on electric vehicle demand concerns.
The top S&P 500 sectors this year include tech (.SPLRCT) and communication services (.SPLRCL), which house five of the Magnificent Seven. Energy (.SPNY), financials (.SPSY), and industrials (.SPLRCI) also outperform the S&P 500.
Super Micro Computer (SMCI.O), opens new tab, and Arm Holdings have also had enormous improvements, but Nvidia is the AI poster child. Chipmaker Astera Labs (ALAB.O) shares have more than doubled since its IPO a week ago, indicating AI fervor.
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