The Stock Market Is Doing Something Witnessed Only 2 Times in 153 Years -- and History Is Very Clear About What Happens in the New Year.

Market Performance - The stock market has experienced significant growth over the past three years, with the S&P 500 delivering annual gains of 24%, 23%, and 16% respectively [1] - The S&P 500 has climbed in double digits in each of the past three years, driven by investor interest in growth stocks, particularly in innovative fields such as AI and quantum computing [7] Economic Environment - Investors are optimistic about a lower interest rate environment, as the Federal Reserve began cutting rates in 2024, which reduces borrowing costs for companies and provides relief to consumers [2] - The lower rate environment is seen as beneficial for consumer-related businesses, enhancing their growth potential [2] Market Dynamics - The stock market's upward trajectory has not been linear, facing interruptions from various factors, including President Trump's import tariffs, which raised concerns about corporate earnings [5] - Despite these headwinds, the market rebounded quickly due to negotiations, exceptions for certain industries, and positive corporate earnings reports [6] - Concerns about a potential AI bubble emerged, but investor confidence was restored by high demand for AI products and strong earnings from major AI companies like Nvidia and Advanced Micro Devices [6]