The Nasdaq has broken the 20,000-point mark, but don't celebrate too early.On Wednesday, December 11, tech stocks rebounded sharply, with Alphabet and Meta reaching all-time highs, pushing the Nasdaq 100 index to close above 20,000 points for the first time—another milestone moment for U.S. tech stocks.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ed7632a9-6a38-48b0-8b62-6ef4ae78d832.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/ed7632a9-6a38-48b0-8b62-6ef4ae78d832.png"/>So far this year, the Nasdaq 100 index has risen over 35%.Richard Steinberg, Chief Market Strategist at Koloni Group, stated:<blockquote>“Before Christmas, shiny objects become even shinier... but I think the current gains are borrowing from future potential.”</blockquote>Historically, the U.S. stock market tends to perform well in December, especially in the second half of the month, but this year, investors seem overly enthusiastic.According to FactSet data, historically, the average gain for the S&amp;P 500 index during the week starting December 24 is 1.3%, while this year, the Nasdaq 100 index has already risen 4.3% this month—with a full 20 days left in December! Steinberg noted:<blockquote>“Any rapid rise in the Nasdaq at year-end due to speculative behavior will negatively impact market performance in early 2025.”</blockquote>Additionally, some analysts have warned that while the 20,000-point milestone is an impressive achievement, investors may be “overstating” the significance of this number. Callie Cox, Chief Market Strategist at Ritholtz Wealth Management, remarked:<blockquote>“Round numbers make investors feel better about the future, but the Nasdaq 100 index breaking 20,000 merely reflects the exceptional performance of the tech sector.”</blockquote><h2>“Now is the time to manage greed”</h2>Despite high valuations in the U.S. stock market, investor sentiment remains optimistic.Steinberg stated, this optimism stems from potential “growth-promoting” policies that may be implemented during Trump’s second term, such as additional corporate tax cuts. However, Steinberg also cautioned that the Trump administration will bring many risks:First, those “growth-promoting” policies are not guaranteed, so U.S. growth stocks may perform mediocrely in the first quarter.Second, the yield on the 10-year U.S. Treasury bond remains high, currently at 4.286% as of the time of writing. Steinberg believes this could put pressure on growth stocks, and the Trump administration may exacerbate the fiscal deficit.<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7024c3dc-82f7-450c-883c-3b41251b8510.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7024c3dc-82f7-450c-883c-3b41251b8510.png"/>Finally, Trump’s “America First” policy could lead to a stronger dollar, which may pressure the earnings of large multinational companiesTherefore, Steinberg suggests that investors rebalance their overly stock-heavy portfolios to a closer 60/40 ratio of stocks to bonds.<blockquote>&#34;Now is the time to manage greed.&#34;</blockquote>

Historically, the U.S. stock market usually performs well in December, especially in the second half of the month, but this year investors seem to be overly enthusiastic, with analysts believing that the current gains are overextending future potential

- The Nasdaq 100 index has surpassed 20,000 points for the first time, driven by significant gains in tech stocks like Alphabet and Meta, marking a notable milestone.  
- Despite a year-to-date increase of over 35%, market strategists warn that current gains may be overstretched, potentially impacting future performance negatively.  
- Analysts caution that while the 20,000-point milestone is impressive, it reflects the tech sector's strength rather than a broader market trend, suggesting investors should reassess their portfolios to manage risk.

The Nasdaq has surpassed 20,000 points, analysts "pour cold water": it's just "eating the grain of the next year in advance"