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No one expected a prosperous year for stocks, but it came anyway.
The only disappointment, if you can call it that, was that the Standard & Poor's 500 index came close to setting a new all-time closing high, but failed to do so as all the major averages fell.
Even bitcoin had a great year. It fell that day and was trading at $41,955 just before 4:00 pm ET, a drop of $463 on the day and down 5.6% from an early December high. But the cryptocurrency is still up almost 154% on the year.
The S&P 500 lost 14 points, or 0.3%, to 4,770. The Dow Jones industrials fell 21 points, or 0.05%, to 37,689. The Nasdaq Composite Index fell 84 points, or 0.5%, to 15,011.
For the year, the S&P 500 rose more than 24%, its best performance since 2021. The Dow gained 13.7% for the year, compared to a drop of 8.6% in 2022. The Nasdaq soared 44%, its best result since 2020.
The market's strong performance was a surprise to many in a year that began with pessimistic investors. The Federal Reserve continued its 2022 campaign to combat inflation.
The economy was widely expected to fall into a recession. Oil prices remained relatively high. And consumers seemed in a bad mood.
But after a small increase in July, the Federal Reserve stopped raising interest rates, although market-based rates continued to rise. A powerful rally broke out after the 10-year Treasury bond briefly hit 5% in October and quickly began to retreat.
Federal Reserve Chairman Jerome Powell then added fuel to the rally, suggesting the central bank would begin cutting its key rate in 2024.
At the same time, investors were captivated by the idea of emerging ai technologies and drove up big tech stocks, especially.
NVIDIA (NVDA) – Get a free report and microsoft (MSFT) – Get a free report were among the biggest winners of the frenzy, with increases of 239% and 56.8%, respectively.
