Weekly Market Recap – January 6, 2025
It was another great year for U.S. equities. The S&P 500 rose 23% and hit 57 new all-time highs along the way, the most since 1928. Once again, we have AI to thank for this spectacular performance. The Magnificent 7 rallied 48%, and for the second year in a row, technology, communication services and consumer discretionary were the top performing sectors, while semiconductors & semiconductor equipment was the top performing industry. Nevertheless, gains were slightly less concentrated: the Mag 7 contributed 55% of the index return this year vs. 63% in 2023. This is partly due to an expanded recognition of AI beneficiaries. The utilities sector, for instance, rallied 20% this year as markets priced in elevated electricity demand from data centers. In fact, the second-best performing stock in the S&P 500 was an electrical utility.
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