The S&P 500 closed out 2023 with a gain of more than 24% and the Dow finished near a record high, as easing inflation, a resilient economy, and the prospect of lower interest rates buoyed investors, particularly in the last two months of the year. Stocks closed Friday with modest losses. The AP reports:
- The Dow fell 20.56 points, or 0.1%, to 37,689 after setting a record Thursday.
- The S&P 500 slipped 13.52 points, or 0.3%, to 4,769.83. That is still just 0.6% shy of an all-time high set in January 2022, and it still left the benchmark index with a rare ninth consecutive week of gains.
- The Nasdaq slipped 83.78 points, or 0.6%, to 15,011.35, but that was barely a blemish on an annual gain of more than 43%, its best performance since 2020.
The broader market's gains were driven largely by the so-called Magnificent 7 companies, which include Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla. They accounted for about two-thirds of the gains in the S&P this year, according to S&P Dow Jones Indices. Nvidia lead the group with a gain of about 239%. Most major indexes were able to erase their losses from a dismal 2022. Smaller company stocks had a late rally but managed to erase the bulk of their losses from last year. The rally that started in November helped broaden the gains within the market beyond just the big technology companies. It marked a big psychological shift for investors, said Quincy Krosby, chief global strategist at LPL Financial.
"Investors were able to accept that fact that the market would close the year on a higher note," Krosby said. "Above all else, it was broad participation in the market that reinforced and confirmed gains for smaller company stocks were particularly important." Shares in European markets edged higher Friday, also after a year of gains, per the AP. Benchmark indexes in France and Germany made double-digit advances, while Britain's has climbed just under 4%. Asian markets had a mixed session on the last trading day of the year for most markets. Tokyo's Nikkei 225 gave up 0.2% to 33,464.17. It gained 27% in 2023, its best year in a decade as the Japanese central bank inched toward ending its longstanding ultra-lax monetary policy after inflation finally exceeded its target of about 2%.
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