The bull market is in full force, pushing the major indexes to new all-time highs. The S&P 500, in fact, is on the cusp of a major psychological threshold: 6,000. It may get there by year’s end. 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 – that’s quite an accomplishment. With S&P 6,000 all but in the bag, are Dow 50,000 and Nasdaq 20,000 not far behind?
Let’s do the math on how long it might take for the other two major indexes to reach those milestones.
Dow 50,000
Remember when Dow 20,000 was such a huge milestone? That was less than eight years ago. Now it’s well over 40,000—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 in 2022.
All told, the most staid of the three major indexes is up a mere 15.5% since the beginning of 2022 … with ALL of the gains coming since last December. With the Dow currently at 41,932, it would take a 19.2% run-up for it to reach 50,000. Considering the slower-moving nature of this old, stodgy index, that’s probably a ways off.
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But with the Fed finally cutting interest rates and the bull market starting to spread beyond just the precious few “Magnificent Seven” stocks and artificial intelligence-related plays that have carried it for the past 23 months, it wouldn’t surprise me if the Dow reached 50,000 by the end of 2025.
Nasdaq 20,000
This milestone is within much closer reach – and in the fastest-moving index no less. The Nasdaq has added nearly 5,000 points in the last year alone, a 36.6% gain, thanks mostly to the aforementioned Mag Seven and AI stocks, though other tech-related plays – for which the Nasdaq is known – have joined the fray in the last couple months as the bull market has expanded to be more inclusive.
So, with the index having just poked its head above 18,000, another 2,000 points – or 10.7% – would seem like a pittance. But given that a) the index has already had the biggest run of the bunch, and b) that the air appears to be coming out of both the Mag. 7 and the AI stock balloon a bit, at least in the short term, it might not get to 20,000 as quickly as you might expect.
Barring a recession or an unlikely collapse in the AI narrative, I think it’s a fairly safe bet that Nasdaq 20,000 could be a reality by this time next year.
S&P 6,000
To me, this one seems like the most likely index milestone to hit first. On a percentage basis, it’s easily the closest; with the S&P at just over 5,700 as of this writing, reaching 6,000 would require a mere 5% run-up from here.
Given that the benchmark index is already up nearly 5% in the last three months, and that the market tends to go on a run after the uncertainty of the presidential election has passed, my guess is we’ll reach S&P 6,000 by year’s end, or in January at the latest.
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 grows brighter by the day, 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 a year 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.
