The S&P 500 posted another cracking year in 2024. It grew more than 20% for the second year in a row, leaving global markets trailing in its wake.

Growth-hungry investors were treated to yet another leg of the tech-driven US rally, with AI stocks like Nvidia powering the index to new highs. I’m frustrated because I decided the chipmaker was probably overhyped at the start of 2024. It’s up more than 190% since I decided not to buy it. Ouch.

As a value investor, it’s not the first time I’ve regretted failing to jump on a red-hot momentum stock. With luck, I’ll learn.

The FTSE 100 is due a big recovery

But can the S&P 500 add another 20% this year? Or will the FTSE 100 finally stage its long-awaited comeback?

I should win either ways. I have ample exposure to US fortunes via low-cost trackers Vanguard S&P 500 ETF and the Legal & General Global Technology Index. Both have big stakes in Nvidia and the other tech mega-caps.

Yet I’m not convinced 2025 will deliver another bumper year for the US. A 20% gain on top of last year’s rally would push valuations into even more stretched territory. The S&P 500 already looks pricey, with the Shiller price-to-earnings (P/E) ratio at a staggering 37.26. By contrast, the FTSE 100’s P/E is a modest 15.76.

If earnings growth doesn’t meet expectations, US shares could slump. And with the Fed unlikely to slash rates aggressively, Wall Street might struggle to find its next catalyst.

The US remains irresistible, driven by relentless innovation, healthy profits and a resilient economy. Yet investing is cyclical, and now I think events could swing in favour of the FTSE 100.

The FTSE 100’s appeal

The FTSE 100 is a real underdog, held back by its exposure to old-world industries like energy, mining and financials. But its underperformance has been overdone. Its trailing yield of 3.5% smashes the S&P 500’s 1%. With dividends reinvested, that closes the gap over time.

Last year, my portfolio holding Glencore (LSE: GLEN) was a big flop. The mining giant’s share price dropped 23% as Chinese demand for commodities slumped. Yet commodities are particularly cyclical, and when the Glencore share price flies, it really flies. Despite last year’s disappointment, it’s still up 50% over five years.

Glencore shares look dirt cheap right now, with a trailing P/E of 10.2 times. The trailing yield may be a modest 2.82%, but the board has hinted at paying “top-up shareholder returns” in February. I’m crossing my fingers.

In the longer run, Glencore should benefit from the shift to electric vehicles and renewable energy, driving demand for copper, nickel, and cobalt. Its reliance on coal poses long-term ESG risks though.

Despite being listed in London, Glencore has relatively low exposure to the UK’s fortunes. Given today’s domestic troubles, that may be a plus.

Whatever happens this year, I wouldn’t be without my S&P 500 tracker. But I’m also excited by the FTSE 100. Glencore is just one brilliant opportunity for me. There are plenty more bargains out there.