Washington, D.C., March 3, 2025 – SIFMA published its annual U.S. Equity Market Structure Compendium, which analyzes themes and metrics across equity markets, volatility (VIX), equity trading, exchange-traded funds (ETFs), options trading, and capital formation for 2024.

The Compendium also offers insights into what could happen in 2025, via survey results from our equity markets and options trading committees, as well as representatives from equity and options exchanges. The survey examined respondents’ expectations for market metrics on volatility and trading volumes for equities and options, as well as retail investor participation and stock market performance, including potential upside and downside risks.

According to the report, “Market participants are 8-10% optimistic about the equities market this year – not another 20% optimistic – which would put us at the historical return level (on average since 1928, the S&P 500 returned 8.0%).  Of note, the consensus estimate from equity strategists for the S&P 500 price target to end this year is 6,600 to 6,700 (at the writing of this report). Looking at the numbers, this would represent an almost 14% increase from the end of year price.  However, if you look at the price of the S&P 500 prior to the December FOMC meeting – the one where the Fed spooked markets by lowering expectations for rate cuts in 2025 – it represents a 10-11% return.”

The report also discusses drivers for equity market performance this year, looking both at what drove markets last year and whether that theme can continue in 2025. These include the AI boom, market concentration, higher-for-longer rates, and earnings growth.

Key Takeaways include:

• Equity Markets: The S&P 500 returned an impressive 23.3%, marking the first time we saw consecutive years with 20% plus returns since the 1990s. Performance was not the same across all categories, as the full index outperformed all other segments except for growth. It was a strong year for large cap stocks and growth stocks.
• VIX: The VIX pushed through events to come down for the year, continuing its realignment to historical levels, averaging 15.61 in 2024, -7.5% Y/Y. This was despite having a higher peak than seen since 2020.
• Equity Trading: Equity average daily trading volume (ADV) surpassed the 12 billion shares level, ending the year at 12.2 billion shares, +10.2% Y/Y. A key theme last year was the growth in trading of low price stocks –28% of shares traded were priced $5 or below, and 13.5% were priced under $1.
• ETFs: At 2.4 billion shares, ETF volumes remained elevated to historical levels, +5.8% Y/Y, and represented 19.6% of total equity market volumes. The global ETF industry gathered $1.7 trillion in net inflows in 2024, the highest level of annual net inflows since 2021.
• Options Trading: Options volumes ended the year at 47.3 million contracts, +9.0% Y/Y, and peaked at 70.6 million contracts. A key theme last year was the growth in short-dated options. From 2018 to 2024, the use of short-dated options grew 318.3%, from 6.0 million contracts to 25.1 million contracts, and reached 54.9% of total options volumes, up from 32.6%.
• Capital Formation: Capital markets performed well overall as total equity issuance (excluding SPACs) finished at $221.4 billion, +59.3% Y/Y, and IPO deal value totaled $31.3 billion, +55.8% Y/Y. The number of listed operating companies declined last year to 5,455, -4.4% Y/Y, marking the third year of annual declines in a row.

The full Compendium can be found here.

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.