The stock market has surged out of the gate in 2024.
The S&P 500 -- the index that most people's 401(k)'s track -- reached a record high on Wednesday, putting the index up 10% this year. The tech-heavy Nasdaq has followed close behind with 9% growth over that period, while the Dow Jones Industrial Average has jumped more than 5%.
Markets have benefited from a flurry of good news: stronger-than-expected economic growth, breakthroughs in artificial intelligence, cooling inflation and anticipated interest rate cuts at the Federal Reserve, experts told ABC News.
“All of those things are coming into alignment right now,” Marc Dizard, chief investment strategist at PNC Asset Management Group, told ABC News.
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But the good times may not last, experts said, predicting a downturn in the coming months that could erase some of the gains.
“It wouldn’t surprise me if we have some sort of correction in the spring or summer,” Dizard added.
Despite straining under the weight of the highest interest rates in two decades, the U.S. economy has sustained solid growth.
U.S. job gains far exceeded expectations in February, U.S. Bureau of Labor Statistics data earlier this month showed.
Gross domestic product, adjusted for inflation, grew at a robust 3.3% annual rate over the final three months of last year, according to data from the U.S. Commerce Department.
The flex of economic muscle has helped lift the stock market skyward, extending the gains well beyond typical top performers like tech firms or large corporations, Bret Kenwell, an investing analyst at eToro, told ABC News.
“There’s strength across the board,” Kenwell said.
Still, that broad-based performance has been accompanied by a stellar run among the group of corporate giants that make up the so-called “Magnificent Seven”: Alphabet, Amazon, Apple, Meta, Microsoft, Tesla and Nvidia.
Those companies have surged in large part due to enthusiasm about AI, experts said. Microsoft, for instance, holds a major stake in ChatGPT-maker OpenAI; while Nvidia produces the majority of chips behind the AI boom.
Nvidia has climbed 83% so far this year, a rate more than eightfold faster than the S&P 500. Microsoft has jumped 11%.
“There is a lot of hope around AI,” John DiFucci, a tech analyst at asset management firm Guggenheim, told ABC News.
The Federal Reserve, another source of optimism driving markets higher, said at a meeting earlier this month that a rough patch for inflation has not altered its plans for three interest rate cuts this year.