(Updated with Friday’s closing prices.)
The 2023 rally for stocks in the U.S. accelerated as more investors bought the idea that the Federal Reserve succeeded in its effort to bring inflation to heel.
The S&P 500
SPX
ended Friday with a 24.2% gain for 2023, following a 19.4% decline in 2022. (All price changes in this article exclude dividends). Among the 500 stocks, 65% were up for 2023. Below is a list of the year’s 20 best performers in the benchmark index.
This article focuses on large-cap stocks. MarketWatch Editor in Chief Mark DeCambre took a broader look at all U.S. stocks of companies with market capitalizations of at least $1 billion, to list 10 with gains ranging from 412% to 1,924%.
The Fed began raising short-term interest rates and pushing long-term rates higher in March 2022 by allowing its bond portfolio to run off. That explains the poor performance for stocks in 2022, as bonds and even bank accounts because more attractive to investors.
The central bank hasn’t raised the federal-funds rate since moving it to the current target range of 5.25% to 5.50% in July, and its economic projections point to three rate cuts in 2024.
Investors are anticipating the return to a low-rate environment by scooping up 10-year U.S. Treasury notes
BX:TMUBMUSD10Y,
whose yield ended the year at 3.88%, down from 4.84% on Oct. 27 — the day of the S&P 500’s low for the second half of 2023.
Read: Treasury yields end mostly higher but little changed on year after wild 2023
Before looking at the list of best-performing stocks of 2023, here’s a summary of how the 11 sectors of the S&P 500 performed, with the full index and three more broad indexes at the bottom:
| Sector or index | 2023 price change | 2022 price change | Price change since end of 2021 | Forward P/E | Forward P/E at end of 2022 | Forward P/E at end of 2023 |
| Information Technology | 56.4% | -28.9% | 11.5% | 26.7 | 20.0 | 28.2 |
| Communication Services | 54.4% | -40.4% | -7.6% | 17.4 | 14.3 | 21.0 |
| Consumer Discretionary | 41.0% | -37.6% | -11.4% | 26.2 | 21.7 | 34.7 |
| Industrials | 16.0% | -7.1% | 8.0% | 20.0 | 18.7 | 22.0 |
| Materials | 10.2% | -14.1% | -4.9% | 19.5 | 15.8 | 16.6 |
| Financials | 9.9% | -12.4% | -3.4% | 14.6 | 13.0 | 16.3 |
| Real Estate | 8.3% | -28.4% | -21.6% | 18.3 | 16.9 | 24.7 |
| Healthcare | 0.3% | -3.6% | -3.3% | 18.2 | 17.7 | 17.3 |
| Consumer Staples | -2.2% | -3.2% | -5.4% | 19.3 | 20.6 | 21.4 |
| Energy | -4.8% | 59.0% | 51.8% | 10.9 | 9.8 | 11.1 |
| Utilities | -10.2% | -1.4% | -11.4% | 15.9 | 18.7 | 20.4 |
|
S&P 500 SPX |
24.2% | -19.4% | 0.4% | 19.7 | 16.8 | 21.6 |
|
Dow Jones Industrial Average DJIA |
13.7% | -8.8% | 3.8% | 17.6 | 16.6 | 18.9 |
|
Nasdaq Composite COMP |
43.4% | -33.1% | -3.5% | 26.9 | 22.6 | 32.0 |
|
Nasdaq-100 NDX |
53.8% | -33.0% | 3.5% | 26.3 | 20.9 | 30.3 |
| Source: FactSet | ||||||
A look at 2023 price action really needs to encompass what took place in 2022 for context. The broad indexes haven’t moved much from their levels at the end of 2022 (again, excluding dividends). We have included current forward price-to-earnings ratios along with those at the end of 2021 and 2022. These valuations have declined a bit, which may provide some comfort for investors wondering how likely it is for stocks to continue to rally in 2024.
Biggest price increases among the S&P 500
Here are the 20 stocks in the S&P 500 whose prices rose the most in 2023:
| Company | Ticker | 2023 price change | 2022 price change | Price change since end of 2021 | Forward P/E | Forward P/E at end of 2022 | Forward P/E at end of 2021 |
| Nvidia Corp. |
NVDA, |
239% | -50% | 68% | 24.9 | 34.4 | 58.0 |
| Meta Platforms Inc. Class A |
META, |
194% | -64% | 5% | 20.2 | 14.7 | 23.5 |
| Royal Caribbean Group |
RCL, |
162% | -36% | 68% | 14.3 | 14.9 | 232.4 |
| Builders FirstSource Inc. |
BLDR, |
157% | -24% | 95% | 14.2 | 10.7 | 13.3 |
| Uber Technologies Inc. |
UBER, |
149% | -41% | 47% | 56.9 | N/A | N/A |
| Carnival Corp. |
CCL, |
130% | -60% | -8% | 18.7 | 41.3 | N/A |
| Advanced Micro Devices Inc. |
AMD, |
128% | -55% | 2% | 39.7 | 17.7 | 43.1 |
| PulteGroup Inc. |
PHM, |
127% | -20% | 81% | 9.1 | 6.3 | 6.2 |
| Palo Alto Networks Inc. |
PANW, |
111% | -25% | 59% | 50.2 | 38.0 | 70.1 |
| Tesla Inc. |
TSLA, |
102% | -65% | -29% | 66.2 | 22.3 | 120.3 |
| Broadcom Inc. |
AVGO, |
100% | -16% | 68% | 23.2 | 13.6 | 19.8 |
| Salesforce Inc. |
CRM, |
98% | -48% | 4% | 28.0 | 23.8 | 53.5 |
| Fair Isaac Corp. |
FICO, |
94% | 38% | 168% | 47.1 | 29.3 | 28.7 |
| Arista Networks Inc. |
ANET, |
94% | -16% | 64% | 32.7 | 22.3 | 41.4 |
| Intel Corp. |
INTC, |
90% | -49% | -2% | 26.6 | 14.6 | 13.9 |
| Jabil Inc. |
JBL, |
87% | -3% | 81% | 13.5 | 7.9 | 10.3 |
| Lam Research Corp. |
LRCX, |
86% | -42% | 9% | 25.2 | 13.5 | 20.2 |
| ServiceNow Inc. |
NOW, |
82% | -40% | 9% | 56.0 | 42.6 | 90.1 |
| Amazon.com Inc. |
AMZN, |
81% | -50% | -9% | 42.0 | 46.7 | 64.9 |
| Monolithic Power Systems Inc. |
MPWR, |
78% | -28% | 28% | 49.1 | 27.3 | 57.9 |
| Source: FactSet | |||||||
Click on the tickers for more about each company.
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Don’t miss: Nvidia tops list of Wall Street’s 20 favorite stocks for 2024
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