The bull market is in full force, pushing the major indexes to new all-time highs in the last month. The S&P 500 and Nasdaq, in fact, broke through major psychological thresholds at the beginning of the year: 6,000 and 20,000, respectively. Can they break through another one in the same year?
Considering the benchmark U.S. index dipped below 4,000 in early 2023 – it didn’t climb above 4,000 for good until that March – and that the tech-heavy Nasdaq was barely over 10,000 in late 2022, it shows how powerful this three-year, artificial intelligence-driven bull market has been, at least for the major indexes. Could Dow 50,000 not be far behind? And can the market’s momentum carry the S&P to 7,000 and the Nasdaq to 25,000 by year’s end?
Let’s do the math on how long it might take for all three major indexes to reach those round numbers.
Dow 50,000
Remember when Dow 20,000 was such a huge milestone? That was less than nine years ago. Now it’s well over 45,000—despite the fact that the Dow has been the slowest-rising of the three major stock market indexes, though it also fell a lot less than the other two during the 2022 bear market.
All told, the most staid of the three major indexes is up a mere 33% since the beginning of 2022 … with ALL of the gains coming since the start of 2024. With the Dow currently at 48,182, it would take a mere 3.8% bump for it to reach 50,000. Considering the index is up 4.6% in just the last month, that could easily happen by year’s end. In fact, with the air coming out of the AI balloon a bit lately, and with investors starting to rotate into some of the more defensive names that populate the Dow, this might be the most likely of the three major indexes to reach its next round-number benchmark first.
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Nasdaq 25,000
This milestone is a bit further off, albeit for a much faster-moving index. The Nasdaq has added more than 8,000 points since the start of 2024, a 59.5% gain, thanks mostly to the Mag Seven and AI stocks.
So, with the index having flirted with the 24,000 mark late last month (actually, it got there very briefly on an intraday basis) before pulling back sharply this month, it would take about an 8% run-up from here to get to 25,000. I don’t think it gets there this year, as the recent weakness of the AI trade could drag on for another couple weeks, if not months.
Barring a recession, however, I’ll say the Nasdaq tops 25,000 sometime in the first half of 2026 … though it may not stay above that level for long, with the AI narrative possibly running out of steam.
S&P 7,000
This could go either way. On a percentage basis, it’s even closer than the Dow; as of this writing, the S&P is just 2.9% away from 7,000.
However, the S&P topped out around 6,900 last month and hasn’t been able to get any traction since. Like the Nasdaq, it’s a bit too reliant on the Mag. Seven, which make up more than one third of its total weighting. That said … 2.9% ain’t much to ask for. The index is up 2.3% in the last month, despite some November turbulence.
I say it gets there. The combination of the usually bullish holiday shopping season and the strong possibility of another rate cut should provide the S&P with enough of a tailwind to reach 7,000 by year’s end, if just barely.
Of course, here’s the part where I remind you that past returns are not indicative of future performance. Even as the current stock market picture looks mostly bright, there’s always the chance that an unexpected event (like, say, the global pandemic in 2020) can knock it back.
But chances are, stock prices will be higher six months from now than they are today. Perhaps significantly higher.
Ultimately, big shiny numbers don’t really matter anyway when it comes to indexes. They’re convenient measuring sticks and fun talking points. And with the bull market in full swing, it’s a good time to dream big.
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*This post is periodically updated to reflect market conditions.
