Investment opportunities in the US stock market in 2024: Which indices are worth watching?

The US stock market experienced a volatile year in 2023 but ended on a relatively positive note. As the largest market in the world, accounting for up to 75% of global market capitalization, every move from Wall Street creates ripple effects across the entire global financial system. So, which figures should investors pay attention to during this period?

The Four Main US Stock Indices to Watch

Among over 5,000 indices listed in the US, the four most prominent are Dow Jones (DJIA), S&P 500, Nasdaq Composite, and Nasdaq 100. Each index has its own story and reflects different aspects of the US economy.

Dow Jones is the “grandfather” of indices, created in 1896 by Charles Dow. Representing about 25% of the US stock market value, this index includes 30 of the largest companies and is considered a “health indicator” of the US economy. As of (March 2024), its value stands at 39,411 points.

S&P 500 provides a broader picture with 500 leading listed companies. Covering up to 70% of the US stock market ($43.9 billion), this index is regarded as the best gauge of the health of large-cap stocks worldwide. Currently, it stands at 5,220 points.

Nasdaq Composite is the tech hub. First introduced in 1971, this index now includes nearly 3,000 companies, from small tech startups to giants like Apple, Microsoft, and Google. Market capitalization reaches $35.48 billion, with a current value of 18,210 points.

Nasdaq 100 is the “younger sister” of Nasdaq Composite, tracking only the top 100 companies. It specializes in Technology, Telecommunications, Biotechnology, Media, and Services sectors. Its current value is 18,269 points with a market cap of $18.24 billion.

US “Star” Stocks of 2024

Looking back over the past five years, tech stocks have delivered astonishing numbers. Apple (AAPL) increased by 261.33%, Microsoft (MSFT) by 256.33%, and NVIDIA (NVDA) leads with an incredible increase of 1,908.58%. Of course, these are past figures.

For hot stocks in 2024, the list includes pharmaceutical and biotech companies. Shockwave Medical surged 828.8%, Viking Therapeutics up 795.13%, Lifeway Foods increased 787%—names that are less known but have generated huge profits.

However, balancing high returns with high risks remains the golden rule. Traditional “superstar” stocks like Apple, Microsoft, and Amazon are still considered safe choices for conservative investors.

Trading Hours and How to Get Started

Both NYSE and Nasdaq operate from Monday to Friday, with main trading hours from 8:30 PM to 2:00 AM (Vietnam time). Before the main market opens, there is pre-market trading from 7:00 PM to 8:30 PM, and after hours trading from 3:00 AM to 5:30 AM.

For Vietnamese investors, directly purchasing US stocks faces legal barriers. The most common method now is trading via CFD contracts (CFD)—a derivative instrument allowing profit from price differences without owning the actual stocks. The advantage is you can profit in both directions: when prices go up or down.

Market Turning Points in 2024-2025

2022-2023 was a “dark” period for the US stock market. Energy crises, Russia-Ukraine war, global inflation, and Fed’s interest rate hikes created a “perfect storm” for investors.

But from October 2023 onward, signs of change appeared. Dow Jones rose 5.59% in the first three months of 2024 after the Fed signaled rate cuts. S&P 500 also “bounced back” with nearly 10% growth. Nasdaq Composite increased 2.28% just in March 2024. Nasdaq 100 was the brightest star, up 24.17% over the past six months.

Comparing five-year data shows: S&P 500 up 85.78%, Dow Jones up 54.13%, Nasdaq 100 up 147.43%. What do these figures tell us? The tech sector still generates the best returns.

What Will Decide the Future?

According to Goldman Sachs, the Fed is expected to cut interest rates 3 times in 2024 and 4 times in 2025, aiming to bring long-term rates down to 3.25-3.5%. This is good news for investors, as lower interest rates generally make stock investments more attractive compared to bonds.

However, not everything is sunshine. Geopolitical tensions in Ukraine and the Middle East remain “slow-moving bombs” for the markets. If conflicts escalate, traders will “flee” to safe-haven assets like gold or Bitcoin, slowing down the rally of US stocks. A leading investor commented: “The stock market could decline 7-10% if the Middle East situation worsens.”

What Basis Should You Use for Decisions?

The US stock market is influenced not only by economic reports but also by geopolitical events, crises, natural disasters, or pandemics. This makes investing both exciting and risky.

If you are a conservative investor, S&P 500 is a reliable choice with 500 companies across various sectors—offering natural diversification. If you want to bet on the future of technology, Nasdaq 100 is the stage for new innovations. Dow Jones suits those who want to follow “real America” through 30 top companies.

Whatever your choice, remember that investing is not a game. Always have a plan, manage risks, and learn from past lessons. The US stock market is opening new opportunities—are you ready?