U.S. stocks saw a third consecutive year of big gains, with major indexes closing 2021 near record highs.
Even with the recent turbulence from the Omicron coronavirus variant, the S&P 500 saw a 27% advance for 2021 and has hit 70 highs. It is the third straight year of double-digit gains for the broad index, and the second in the midst of the Covid-19 pandemic. The Dow Jones Industrial Average and Nasdaq Composite have gained 19% and 21%, respectively, this year, helping send the major indexes to their best three-year performance since 1999.
Some traders note that warning signs are flashing: Inflation could turn companies’ and customers’ finances upside down. Many companies that have been market darlings are losing money. Big-name stocks continue to log giant one-day swings. However, individual traders and institutional investors are hungry to take bigger risks and willing to accept bouts of volatility.
The year kicked off with a mind-bending start: Day traders who poked around with stocks early in the pandemic plowed money into meme stocks such as GameStop Corp., disrupting the power dynamic by which professional investors are usually the market king. Money managers say that this year more than ever, they are closely tracking where individual investors park their cash and monitoring their trading activity for clues on the market’s moves.
Cryptocurrencies further entered the mainstream, helped by influencers including
and the debut of the first bitcoin exchange-traded fund. Crypto prices soared, then spiraled lower, then soared again. The market for nonfungible tokens exploded.
Companies made public market debuts with blockbuster valuations. Corporate executives rushed to take advantage of a sky-high stock market, with companies from
Norwegian Cruise Line Holdings Ltd.
to AMC Entertainment Holdings Inc. issuing more shares to raise cash.
Trading burrowed further into pop culture. Rookie investors placed so-called YOLO (“you only live once”) trades, or big risky stock bets, and shared screenshots of their wins and losses on social media.
“When you see…
Read More: In a Wild Year for Markets, Stocks Pull Off Big Gains