Markets 2021: Stocks soar, IPOs explode, crypto goes wild | Business News

Small investors piled into stocks in 2021, at times banding together on online forums like Reddit’s WallStreetBets to stoke a frenzy over certain companies like GameStop. The financially struggling video-game retailer surged more than 1,600% in January. The mania led to big losses for some hedge funds, multiple halts in trading and congressional hearings asking who was getting hurt. The rise of small investors is one reason stocks represented a quarter of household assets as of the third quarter, up from only 13% a decade ago, according to Wells Fargo Securities.

Bond prices fell and, in turn, their yields rose this year, but not as much as one might expect with the economy growing and inflation jumping. Still, yields remain low relative to history. The yield on the 10-year Treasury, for example, is still below where it was in the spring. That could be a product of expectations for inflation to eventually fall and for the economy to moderate its growth too. Low bond yields have been one of the main reasons that stock prices have surged so high: With bonds paying so little, there’s a widespread belief on Wall Street that there is no alternative to buying stocks.

Electric vehicle sales nearly doubled worldwide as automakers rolled out new models. Many consumers bought EVs to avoid burning oil, but others went for the quick acceleration and crisp handling. Shares of Tesla, the world’s EV leader, were up than 40% as of Dec. 22. The industry’s old guard revved up its commitment to EVs — for example, General Motors plans a GMC Hummer EV. Although EVs will only be 5.8% of global new-vehicle sales this year, that figure could grow close to 15% in 2025, says research firm LMC Automotive.