Major global stock markets closed out 2023 trading on Friday with mixed results, with Wall Street posting its best annual rise since 2019 as it enters the new year amid the backdrop of economic and political uncertainty.
The S&P 500, Dow Jones Industrial Average and Nasdaq Composite all fell at the close of the last trading day of 2023, but defied expectations for the year after having recorded strong gains despite the shadows of high interest rates and recession fears.
The indices ended down 0.3 per cent, 0.1 per cent and 0.6 per cent, respectively – but were still big winners for all of 2023.
The benchmark S&P 500 settled more than 24 per cent higher this year, thanks to a stellar run in megacap technology stocks. It was also just a little short of its record closing high it recorded on January 3, 2022.
The so-called Magnificent Seven stocks – comprised of the biggest technology companies – all logged remarkable runs in 2023.
Chipmaker Nvidia, among those at the forefront of the generative artificial intelligence derby, spiked nearly 239 per cent as it ramped up the development and manufacturing of processors designed for the growing and powerful technology.
Meta Platforms, the parent company of Facebook and another big generative AI player, and Elon Musk’s electric vehicle manufacturer Tesla Motors also recorded triple-digit stock growth at 194.1 per cent and 101.7 per cent, respectively.
Amazon, the world’s biggest e-commerce company, surged almost 81 per cent, while Google parent Alphabet leapt 58.3 per cent. Microsoft and Apple jumped 56.8 per cent and 48.2 per cent, respectively. All four companies are also involved in generative AI.
The Dow rose 13.7 per cent and the tech-heavy Nasdaq surged 13.7 per cent and 43.4 per cent, respectively, in 2023.
Despite the strength in technology stocks, questions remain on how they would perform in 2024, with expectations for a slowdown, said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
“The million-dollar question is what will happen next year. Of course, we don’t know, nobody knows, and our crystal balls completely missed the AI rally that marked 2023, yet the general expectation is a cool down in the technology rally,” she said.
Meanwhile, inflation, remains high and has been the focal point of the Federal Reserve’s run of interest rate hikes.
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