Nvidia Carried the S&P 500 to New Highs in 2024

Like last year's rally, the S&P 500's strong showing in 2024 was largely fueled by the excitement surrounding artificial intelligence, as chipmaker Nvidia, which quite literally powers the transition to an AI-centric future, saw its share price surge 171 percent through the year. Due to the fact that the S&P 500 is a market-cap-weighted index, the performance of mega cap companies such as Nvidia, Apple and Microsoft, all valued at more than $3 trillion, is particularly important to its overall performance, which also explains why Apple was the second largest contributor to the index's total return in 2024, despite the company's share price increasing by a more modest 31 percent - at least by Apple's standards.

According to Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, Nvidia's 171-percent return in 2024, contributed more than 22 percent to the S&P 500's overall return, putting it miles ahead of Apple, Amazon and Meta, who accounted for 7.4, 5.9 and 5.5 percent of the index' full-year return, respectively. At the other end of the scale, Intel, which was the largest negative contributor to the index's performance, followed by Adobe, Boeing, CVS Health and Nike. All of these companies saw their share prices drop by 25 (Adobe) to 60 percent (Intel), but due to their limited weight in the index, their performance only accounted for minus 4.2 percent of the index's overall performance, dragging its full-year return down 0.83 percentage points on aggregate.