The commencement of trading for 2025 in the United States witnessed a dip in the stock market, marking a challenging start for many investorsThe major indices, despite opening higher, faced a downward trend throughout the dayYet, this adjustment seemed to have little impact on the overall confidence within the marketThe underlying reason for this resilience can be attributed to the remarkable performance of the U.Sstock market throughout 2024, which had not only exceeded expectations but also proved to be a beacon of growth amid various global uncertainties.

Throughout 2024, the stock market experienced an impressive surge, notably among heavyweight technology companies such as Apple, Microsoft, and NvidiaThese giants propelled the S&P 500 index to achieve a remarkable annual increase of over 20% for the second consecutive year—an occurrence that has been documented only ten times since 1871. This trend did not appear in isolation; global indices mirrored this momentum

The Nikkei 225, FTSE 100, and DAX indexes also reached record highs within the year, highlighting a broadly positive investment climate.

In foreign exchange markets, the U.Sdollar was a key player, boasting an approximate 8% increase for 2024, marking its best yearly performance since 2015. Conversely, many non-dollar currencies faced significant pressures, with the Japanese yen, Australian dollar, and New Zealand dollar all depreciating by nearly 10% during the same periodThis stark contrast paints a vivid picture of the dynamics at play within the global economy.

As geopolitical tensions persisted throughout the year, the prices of essential commodities—energy, metals, and agricultural products—exhibited a diverse range of movements, further complicating the economic landscapeInvestment assets trembled on the global stage, eliciting questions about the consistent trends of 2024 and the path that assets would take as we stepped into 2025.

The year 2024 proved to be exceptional for U.S

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equities, elucidating an array of factors contributing to the continuous growth of major indicesNotably, the S&P 500 index posted an overall gain of 24%, with its performance punctuated by 57 record highs throughout the year, excluding only April and AugustThe resilience showcased was further echoed by milestones in the tech sector, which saw the Nasdaq Composite index surpassing the 20,000 mark and the Dow Jones Industrial Average crossing 45,000 for the first time.

According to Mingming, Chief Economist at CITIC Securities, several catalysts were crucial for this unprecedented growthFirst, the shift in the Federal Reserve's monetary policy from accommodative to tightening significantly influenced stock prices positivelySecondly, the U.Seconomy's fundamentals were aligning with global investor expectations, easing recession fears and consequently fueling further gains in the markets

The inflow of capital into U.Sequities fostered a virtuous cycle, bolstering investor confidence and further underpinning market robustness.

The substantial contributions from technology stocks have made them the predominant focus within this growth narrativeThe so-called "Magnificent Seven" tech giants became the clear victors, with Amazon soaring 46%, Meta (previously Facebook) surging a staggering 70.1%, while Microsoft, Apple, Google, and Tesla also posted impressive figures, rising by 14.7%, 35.8%, 37.5%, and 62.5% respectivelyNvidia took the lead with an impressive 178% increase for 2024, following a previous year’s surge of 239%. This fervor within tech stocks and their accompanying valuations have solidified their importance in driving market dynamics.

Another impactful aspect noted by Zhang Yuguo, a member of the International Financial Forum, is the tangible influence of these major corporations on the overall capital markets in the U.S

The total market capitalization of the "Seven Giants" surpassed $18 trillion by the end of 2024, marking a staggering $6 trillion increase compared to the previous year, comprising about a third of the S&P 500's overall weight.

Amidst this optimistic scenario, cautionary sentiments were articulated by Wang Xinjie, Chief Investment Strategist at Standard Chartered China Wealth ManagementHe indicated that future growth and expectations regarding interest rate cuts in the U.Seconomy are critical focal points for investors, as any underwhelming performance could significantly disrupt market tranquility.

Outside the U.S., other notable global capital markets, such as the Nikkei 225 in Japan, FTSE 100 in the UK, and DAX index in Germany, also achieved historical highs during 2024. Europe's STOXX 600 index reported a substantial 6.8% gain, while the FTSE 100 climbed by 5.9%, and the DAX 30 jumped 18.7%. Japan's benchmark Nikkei index concluded the year with an increase of 19.8%.

Discussing the upward trajectories of these major indices, Wang Xinjie pointed to the normalization of global monetary policy in 2024, which allowed various asset classes to perform positively amidst macro and microeconomic synergies

The impressive rally in international stock markets was spearheaded by the uplift in global economic growth expectations led by the U.Sand corresponding corporate earnings growth.

As the dollar enjoyed a robust year, its performance on the foreign exchange markets was noteworthyThe dollar index, after continuous fluctuations, concluded 2024 with a notable rise, marking its best annual performance in nearly a decadeStarting from October, the dollar experienced a three-month streak of gains, with the fourth quarter especially strong following hawkish signs from the Federal Reserve, culminating in a two-year high for the dollar index.

This dollar strength contributed to depreciation across various non-dollar currenciesYear-end data revealed that the Japanese yen experienced a 12.3% decline against the dollar, while the Australian and New Zealand dollars faced similar pressures of 9.15% and 11.48%, respectively

Currencies across Asia, particularly those of export-dependent economies like South Korea, Singapore, Thailand, and Malaysia also came under significant strain.

For nations characterized by a fragile foreign exchange standing, particularly those grappling with mounting fiscal deficits, the surging dollar poses additional challenges, heightening their difficulty in meeting dollar-denominated debtsGoldman Sachs noted that potential headwinds for dollar strength may arise in 2025 if the Federal Reserve opts for substantial rate cuts in response to economic pressures, as well as implementation of trade-protection measures in response to trade deficits.

A noteworthy development in 2024 saw currencies like the Turkish lira and Argentine peso stabilize following previous significant devaluationsThese currencies, having faced depreciations exceeding 20% against the dollar, began to recover somewhat, ending the year with reduced losses: the Turkish lira depreciated by 17.6%, the Mexican peso by 18.64%, and the Argentine peso by 19.1%.

Mingming highlights that the stabilization of these volatile currencies signals a transition toward diminishing high inflation's adverse impacts, ushing in more normalized monetary policies and fostering greater predictability in global currency movements, thereby mitigating potential systemic financial risks.

As we project into 2025, the anticipated trajectory for non-dollar currencies remains cautious, with projections indicating further pressures on emerging market currencies—particularly those reliant on exports to the U.S.—due to enhanced resilience in the American economy and prevailing interest rate differentials

Geopolitical tensions and trade complications promise to introduce more volatility for these currencies moving forward.

In the commodities arena, 2024 showcased the persistent allure of gold, recognized as the reigning king of safe-haven assetsPerformance metrics indicated that gold achieved an impressive annual return of 27.26%, ranking third among major asset classes, trailing only behind the technology giants and natural gasThe price of gold escalated from $2,063.04 at the beginning of the year to peak at $2,790, marking a staggering increase of over 35% during the year.

Despite experiencing fluctuations, gold was bolstered by various fundamental factors, as described by market analysts, who highlighted its dual roles—both as an investment asset and currency anchor for central banksMacroeconomic shifts and rising geopolitical tensions underscored gold's position as a vital hedge for investors navigating uncertainty.

Looking ahead to 2025, experts predict that while gold prices are likely to increase, the pace of this growth may decelerate