S&P 500's Record-Breaking Streak In 2024 Could Signal Caution For Investors In 2025, Warn Analysts: 'Stocks Do Not Go Up Forever'

The stock market’s remarkable performance in 2024, with the S&P 500 hitting 54 all-time highs, may not be a positive indicator for the future, according to analysts.

What Happened: The S&P 500’s record-breaking run in 2024, fueled by factors such as Fed rate cuts, enthusiasm for artificial intelligence, and Donald Trump’s pro-market policies, has been impressive. However, this trend could be a cause for concern, as historically, years with numerous record highs have been followed by poor stock performance, analysts at Ned Davis Research said in a Monday note.

Historical data since 1928 shows that in years when the S&P 500 hit more than 35 record highs, the median gain for the index the following year was a mere 5.8%, falling short of the long-term average of 8%. In years with at least 50 record highs, the median return was -6% the following year.

“The obvious challenge to momentum studies is that stocks do not go up forever,” strategists said.

“Perhaps ...

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