Markets in 2024: Wall Street’s high-octane rally keeps investors captive to the US

In 2024, global markets have experienced a surprising surge, with world stocks on track for their second consecutive annual gain of over 17%. Despite ongoing geopolitical tensions in the Middle East and Ukraine, a slow European economy, and China’s economic slowdown, U.S. markets have been the primary driver of growth. The rally has been fueled by artificial intelligence advancements and robust U.S. economic growth, with Wall Street’s S&P 500 jumping 24%, marking its best two-year streak since 1998. The U.S. dollar has also strengthened by 7% against its global counterparts.

While U.S. stocks have outperformed European stocks by a record margin this year, European markets remain under pressure due to the euro’s weakness and slow economic recovery. The eurozone economy is expected to recover in 2025, but the outlook remains uncertain. Emerging markets have struggled, with local currencies hit hard by U.S. tariff fears and the strength of the dollar, leaving investors cautious. However, gold has seen a 27% gain in 2024, offering some relief to those seeking diversification in a turbulent market.

The bond market has faced significant challenges, with interest rates rising in key economies, including the U.S., Japan, and the U.K. Despite initial expectations of rate cuts, inflation has proven more persistent than anticipated, causing bond investors to suffer losses. Meanwhile, some riskier markets, such as Lebanon and Argentina, have delivered surprising gains, as investors bet on political changes and the potential impact of a return of Trump’s policies. With the global market outlook uncertain, 2025 is expected to bring further volatility, particularly in the bond and emerging market sectors.