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 mainstream. And small investors, often taking their cues from social media and online forum sites like Reddit, sent shares in GameStop and other companies soaring and helped popularize the use of commission-free stock trading portals like Robinhood.

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INFLATION GETS STICKY

Inflation awoke from a long slumber in 2021. The U.S. government's consumer price index skyrocketed 6.8% in the 12 months that ended in November — the sharpest such jump since 1982. The speed of the global economic recovery surprised businesses, which had laid off workers, let shelves and warehouses go bare, and cut factory output when the coronavirus pandemic first hit. They're still struggling to catch up with demand, creating supply bottlenecks and higher costs for raw materials and finished goods.

Many companies have raised prices to offset higher input costs and keep profit margins steady. Consumers are paying more for everything from Pampers diapers and Tide detergent to Cheerios to household appliances. It's unclear exactly when the supply bottlenecks will ease, so further price increases could be in the picture for 2022.

— Paul Wiseman, Damian Troise

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INVESTORS PILE INTO 'MEME STOCKS'

Small investors piled into stocks in 2021, at times banding together on online forums like Reddit's WallStreetBets to stoke a frenzy over certain targets like GameStop. The financially struggling video-game retailer surged more than 1,600% in January as novice investors using trading apps like Robinhood snapped up shares. 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. The "meme stock" phenomenon even spurred at least one investment firm to launch an exchange-traded fund of stocks getting talked up on social media. The trend also helped boost revenue for Robinhood, an online trading platform popular with new investors, though the company's shares made an underwhelming stock market debut in July and are down sharply for the year.

— Alex Veiga

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BONDED RETURNS

The U.S. economy grew strongly this year, and inflation jumped enough to jolt shoppers across the country. Usually such things send bond prices tumbling and, in turn, their yields soaring. But that didn't happen in 2021. Yields did rise through the year, and they to be sure left investors with losses in what's supposed to be the safe part of their portfolios. The largest bond fund lost 1.4% as of Dec. 13, on track for its worst yearly performance in eight.

But 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.

— Stan Choe

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BATTERY POWERS

Electric vehicle sales nearly doubled in the U.S. and 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, jumped more than 40% as of Dec. 22. An order of 100,000 Teslas from Hertz generated outsize enthusiasm from investors. Amazon-backed startup Rivian soared after going public even though it hasn't made a profit.

The industry's old guard revved up its commitment to EVs — for example, General Motors plans a GMC Hummer EV. But GM had to stop selling two EVs due to a recall for battery fires, and rival Ford is expected to top it in EV sales. GM shares still rose more than 30%; Ford shares more than doubled. 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.

— Tom Krisher

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GOT CHIPS?

A global chip shortage had repercussions across much of the economy in 2021, thwarting consumers who faced delays in getting new cars, video game consoles and an array of other products. The shortage had its origins in the outbreak of the COVID-19 pandemic, starting with the lockdowns shuttering Asian semiconductor factories in early 2020. As 2022 approaches, some analysts are now worried about what happens when the shortages ease and an oversupply of chips affects prices.

Many chipmakers, electronics manufacturers and governments have outlined long-term plans to diversify supply chains so that a virus outbreak, ice storm, earthquake or political conflict in one region doesn't disrupt the global supply of a key ingredient for so many tech products.

Shares of Nvidia, whose processors help power video games, data centers, artificial intelligence, virtual reality, and automobiles, have more than doubled in consecutive years.

— Matt O'Brien

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CRYPTO GOES MAINSTREAM

Cryptocurrency prices went on another roller coaster this past year: surging, plunging and then cycling again. What made 2021 different was how many more people experienced those swings, as crypto crossed into the mainstream. In the most famous example, El Salvador became the first country to make Bitcoin legal tender. Perhaps more impactful for financial markets, the first exchange-traded fund tied to Bitcoin futures also began to trade. It offered professional investors an easy way into the market, and it took just a month to amass $1.4 billion in assets.

Of course, crypto still retains a sense of iconoclasm, and even some fun. Dogecoin, a coin that started as a joke, climbed more than 15,500% from the start of the year to 74 cents in the summer, as traders tried to goose it to the $1 level. It recently fell back below 16 cents.

— Stan Choe

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CHINA TECH CRACKDOWN

Anxious investors knocked more than $1 trillion off the value of high-flying Chinese tech companies on foreign stock exchanges after the ruling Communist Party tightened control over their industries. Industry leaders in e-commerce, entertainment and other fields have been warned not to use their dominance to keep out new competitors.

Alibaba Group, the world's biggest e-commerce company by sales volume, was fined $2.8 billion on charges it suppressed competition. Tencent Holding, operator of the popular WeChat message service, and others have been fined over acquisitions regulators said increased their dominance. Tencent was ordered to end exclusive contracts with music suppliers. Alibaba's stock market value has plunged more than 60% from its October 2020 peak of $838 billion. Tencent lost 43% to $539 billion. Didi Global Inc., China's dominant ride-hailing service, lost almost half its market value after regulators criticized its handling of customer data. Didi announced Dec. 3 it would pull out of the New York Stock Exchange and move share trading to Hong Kong.

— Joe McDonald

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GONE TO MARKET

Initial public offerings exploded in 2021 as companies sought to take advantage of a soaring stock market. There were 389 IPOs through the first week of December, easily surpassing the total of 221 for all of last year, according to Renaissance Capital. Some of the more notable IPOs in 2021 included online broker Robinhood, which has helped reshape the stock market by bringing in millions of new investors. Dating app Bumble and electric vehicle maker Rivian Automotive were also highly anticipated IPOs.

It was also a blowout year for special-purpose acquisition companies. SPACs, as they are known, are an alternative way for companies to become publicly traded. Also referred to as blank-check companies, they raise money from public investors with the intent of buying a private company later. Southeast Asia's largest ride-hailing company Grab went public in the biggest-ever SPAC deal in December. However, SPACs have been facing tougher scrutiny from regulators. Securities and Exchange Commission Chair Gary Gensler has called for greater disclosures in SPAC deals.

— Damian J. Troise

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ENERGY CRUNCH

Rising prices for oil and natural gas unsettled the global economic recovery in 2021. The biggest crunch came in Europe, where by December natural gas prices had soared more than nine times their level at the start of the year amid fears that reserves would run out in a colder than average winter. Energy prices spilled over into geopolitics as Russian President Vladimir Putin cited Europe's gas shortage to push for final regulatory approval of the contentious Nord Stream 2 pipeline. Amid tensions over Russian troop movements near Ukraine, U.S. Secretary of State Antony Blinken said it was "very unlikely" Nord Steam gas would flow if Russia attacked.

Meanwhile President Joe Biden tried pressuring OPEC to boost production and tapping his country's emergency stockpiles of oil in an effort to lower gasoline prices for U.S. drivers. Oil and gasoline prices did fall, but mostly due to fears of another possible economic slowdown from the ongoing coronavirus pandemic. The average pump price two days before Christmas was $3.29 per gallon, down 11 cents in a month but up from $2.25 a year ago.

—- David McHugh

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REALITY AND THE METAVERSE

Social media companies had an eventful year, starting with Twitter and Facebook banning then-President Donald Trump from their platforms after the Capitol riots. Later in the year the debate over social media's impact on the public exploded when Facebook whistleblower Frances Haugen leaked tens of thousands of damning internal documents about the harm the company is causing to its users around the world. Amid the fallout that has included congressional hearings, Facebook rebranded itself Meta Platforms, reflecting its commitment to developing the metaverse. CEO Mark Zuckerberg described the metaverse as a "virtual environment" you can go inside of — instead of just looking at on a screen.

Meta's stock price and revenue have so far withstood the turmoil. Twitter, on the other hand, has not fared as well, at least with investors. While some big investors had been calling for Jack Dorsey to step down as CEO, actual news of his departure in November failed to boost the company's stock price.

— Barbara Ortutay