Markets 2021: Stocks soar, IPOs explode, crypto goes wild

Wall Street delivered another strong year for investors in 2021, as a resurgence in consumer demand fueled by the reopening of the global economy pumped up corporate profits.

As of Dec. 22, the S&P 500 had risen 25%, its third-straight annual increase. Along the way, the benchmark index set 67 all-time highs.

The market weathered a number of challenges along the way. Skyrocketing inflation, worldwide supply chain disruptions and a global economy still vulnerable to the uncertainty created by the COVID-19 pandemic fueled market volatility, especially toward the end of the year.

Still, Wall Street got a boost from the Federal Reserve, which kept its key short-term interest rate at near zero all year. That helped keep borrowing costs for companies low and stock valuations high. However, investors expect the Fed to start pushing rates higher next year.

Investors had bullish expectations coming into 2021, betting that the distribution of COVID-19 vaccines would pave the way for businesses and their customers to get back to normal.

While many industries have yet to fully bounce back, especially travel and tourism, the gradual reopening of the economy in the spring ushered in a swell of demand that pushed corporate earnings growth above Wall Street’s expectations, a trend that continued into the fall. That helped juice gains for stocks.

Energy sector stocks have led the S&P 500, vaulting 46% as the price of U.S. crude oil climbed 50%. Financial stocks also have had a banner year, vaulting 31% after falling in 2020. Technology companies, which led the market in 2020, had another solid year, gaining 32%.

Initial public offerings exploded as companies sought to take advantage of the rising stock market. Investing in Bitcoin and other cryptocurrencies became more...