The SPDR S&P 500 ETF Trust SPY +1.20% is weighted by market capitalisation. This means that its three biggest holdings—Apple Inc. AAPL +1.88%, Microsoft Corp. MSFT -0.10%, and Nvidia Corp. NVDA +3.08%—make up 20.5% of its portfolio. Overall, this has been a good year for the stock market. However, it might be interesting to learn more about how big the market really is.
If you put profits back into the stocks, this year-to-date chart below shows how much money the S&P 500 and the S&P 500 Equal Weight Index have made: SP500EW +1.39% through Thursday:
The S&P 500 had lost 2.7% in December through Thursday. There’s no reason to be upset about that since the U.S. large-cap standard index was still up 24.7% in 2024. However, the S&P 500 Equal Weight Index went down 7.1% for the month and had a return of less than half of that of the cap-weighted index for 2024. As of Thursday, one-third of the stocks in the S&P 500 had overall returns that were negative for 2024.
It has been a big drop in December; 89% of the S&P 500 has shown negative results.
The Federal Open Market Committee lowered the federal funds rate by another 25 basis points on Wednesday. Their goal now is for it to be between 4.25% and 4.50%. When interest rates are lowered, most people think that the stock and bond markets will do well. However, Christine Idzelis explained why stocks and bonds fell and volatility rose on Wednesday after the Federal Reserve lowered rates.
Michael Brush looked at big market patterns to figure out why the stock market’s two-year party was about to end and why the drops could get worse in January.
Vivien Lou Chen talked about how trade in U.S. Treasury bonds has been a sign that stocks are about to go down again.
A look ahead to the end of the year and changes to your long-term plan
FactSet says that the S&P 500 has had an average yearly return of 10.93% over the past 30 years, when dividends are reinvested. At that rate, your money would double every year for seven years.
You may have forgotten that the S&P 500 fell 18.1% in 2022 since it has returned 24.7% so far this year, following a return of 26.3% in 2023. It has given back 28.9% since the end of 2021.
So what should you think about as the market gets shaky in December after two great years? Mark Hulbert looked at how the stock market did each year for a much longer time and came to this conclusion about what to expect in 2025.
