The stake economy soared this year. What will happen in 2025?

The stake economy climbed to record highs in 2024, extending banner gains achieved the previous year.

The S&P 500 — the index that most people’s 401(k)’s track — climbed nearly 28% this year, as of Monday.

The tech-heavy Nasdaq leapt a staggering 34% over that period; while the Dow Jones Industrial Average climbed 16%.

Consecutive years of powerful stake economy act have posed a quandary for forecasters: Will high stake prices scare off would-be investors in 2025, or will momentum push shares even higher?

Experts have attributed the rise of distribute prices this year to a set of favorable trends: Solid economic growth, thrill about artificial intelligence and the long-awaited commence of gain rate cuts at the Federal savings.

Those tail winds are expected to keep pushing stocks skyward in 2025, experts said, but they cautioned about more-than-usual uncertainty that could prevent further gains or even amplify them. The biggest unknown for stocks in 2025, they said: President-elect Donald Trump.

“As we close the books on 2024 and peer into 2025, perhaps the uncertainties this period are of a magnitude beyond the norm,” Kevin Gordon and Liz Ann Sonders, a pair of resource strategists at Charles Schwab, said last week. “excellent luck figuring this one out.”

excellent information abounded for the stake economy this year, in part because the economy defied doomsayers.

The economy continued to develop at a solid clip in 2024, while worth rise fell. That act kept the U.S. on track for a “soft landing,” in which the economy averts a decline while worth rise returns to normal.

Gross domestic product grew at a robust 2.8% annualized rate over three months ending in September, the most recent period for which data is available.

“U.S. strength remains undiminished,” Seema Shah, chief global strategist at capital resource Management, told ABC information in a statement.

worth rise has slowed dramatically from a peak of more than 9% in June 2022. A months-long stretch of advancement earlier this year helped nudge the Federal savings toward its first gain rate cuts in four years.

In recent months, the Fed has cut its point of reference rate three-quarters of a percentage point, dialing back its fight against worth rise and delivering some relief for borrowers saddled with high costs.

Over period, rate cuts ease the burden on borrowers for everything from home mortgages to capital cards to cars, making it cheaper to get a financing or refinance one. The cuts also boost business valuations, potentially helping fuel returns for stockholders.

The Fed is expected to continue cutting gain rates next year, though a recent bout of stubborn worth rise could leisurely, or even pause, the lowering of rates, experts previously told ABC information.

“Markets expect gradual rate cuts next year, which would imply worth rise stays under control, the job economy hums along at an acceptable pace, stocks rise, and everybody is joyful,” Callie Cox, chief economy strategist at Ritholtz riches Management, said in a statement to ABC information.

“Reality isn’t that cut and arid, though,” Cox added.

Some analysts pointed to Trump’s policies as a major source of uncertainty for the country’s economic act and, in turn, the stake economy.

Trump has vowed to cut taxes for individuals and corporations, which could spur market advancement and raise stake prices, some experts said. However, they added, Trump’s proposed tariffs could hurt some U.S. producers and retailers that depend on imported raw materials, and may factor a resurgence of worth rise. As a outcome, some stocks could suffer.

“The most significant wild card on the table for 2025 will be the potential implementation of tariffs,” David Sekera, chief U.S. economy strategist for Morningstar, said earlier this month.

Since 1990, there have been 12 years in which the S&P 500 has gained 20% or more, Cox said. The stake economy crossed that threshold last year, and is almost sure to do so when 2024 comes to an complete. It will be challenging for the stake economy to achieve that feat for a third consecutive year, Cox added.

“If you’re expecting a repeat of 2024, you’re asking a lot of the economy gods,” Cox said.

Still, the enticing possibility of another rally will draw investor gain as observers watch for any early signs of sputtering.

“The opportunities for investors are plenty, but so are the obstacles,” Shah said.