The macroeconomic challenges that characterized much of the past two years are beginning to fade. After plunging 35% in 2022, the Nasdaq Composite bounced back in 2023, gaining 43%. While the market is currently regrouping, history suggests there could be more gains to come.
Reviewing data going back 51 years, in every year that followed a market recovery, the tech-centric index has gained again in a second year by an average of 19%. That gives us good reason to believe the current rally still has legs. The economy is still fragile, and conditions could erode, but another strong year may be ahead for the stock market.
Helping fuel the market’s overall gains last year were a group of investor favorite stocks known collectively as the “Magnificent Seven,” which outpaced the broader market in 2023 by a wide margin.
- Nvidia: Up 239%
- Meta Platforms: Up 194%
- Tesla: Up 102%
- Amazon (AMZN 1.20%): Up 81%
- Alphabet: Up 58%
- Microsoft: Up…
