The S&P 500, Dow & Nasdaq Since 2000 Highs as of May 2025

As of May 2025, the S&P 500, Dow 30, and Nasdaq Composite increased 6.2%, 3.9%, and 9.6% respectively from April, with inflation-adjusted gains of 5.8%, 3.6%, and 9.2%. Despite a challenging start to the century, each index has seen substantial growth over the last decade, with the S&P 500 growing 106%, the Dow 92%, and the Nasdaq 101% in real terms; however, real compounded annual returns on $1,000 investments made at the 2000 peak in ETFs tracking the S&P 500, Dow, and Nasdaq are 4.73%, 4.76%, and 4.23% respectively.

Analysis

U.S. equity markets demonstrated robust performance in May 2025, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite posting nominal month-over-month gains of 6.2%, 3.9%, and 9.6% respectively. After adjusting for inflation using the CPI, these real gains were 5.8% for the S&P 500, 3.6% for the Dow, and 9.2% for the Nasdaq, indicating significant real appreciation in asset values. This recent strength contributes to a longer-term recovery observed over the past decade, where the S&P 500, Dow, and Nasdaq have grown 106%, 92%, and 101% in real terms, respectively, following a challenging initial 15 years in the 21st century. An examination of ETFs tracking these indices from their 2000 peaks reveals more modest long-term outcomes; $1,000 invested in SPY (tracking S&P 500), DIA (tracking Dow), and QQQ (tracking Nasdaq-100) at their respective 2000 peaks yielded real compounded annual returns of 4.73%, 4.76%, and 4.23% by May 2025. The Nasdaq's higher recent gains align with its market-cap weighting and heavy technology sector focus, contrasting with the S&P 500's broader market representation and the Dow's price-weighted, blue-chip composition. The general market sentiment is reported as strongly positive, with a score of 0.7, suggesting optimism underpins the recent market movements.

Key Decisions for Investors

• Given the strong recent monthly index performance, particularly the Nasdaq's 9.6% nominal gain, and the prevailing strongly positive market sentiment, investors may consider maintaining or tactically increasing exposure to U.S. equities, especially if aligned with growth-oriented strategies.
• Investors should note the divergence in long-term real compounded annual returns since the 2000 peak, with SPY at 4.73%, DIA at 4.76%, and QQQ at 4.23%, underscoring the importance of considering investment horizons and the impact of inflation on returns when selecting index-tracking ETFs.
• The significant real growth over the last decade, following an extended period of stagnation post-2000, highlights the potential benefits of long-term investing through market cycles, while also cautioning to monitor valuations and the sustainability of current momentum.