new york
CNN
—
Bullish sentiment spread across Wall Street on Friday, with the S&P 500 index closing above the 5,000 level for the first time as investors cheered on the latest data showing progress in inflation.
This landmark moment comes at a time of strong economic growth, an artificial intelligence revolution, a better-than-expected earnings season, and expectations that the Federal Reserve will change course to begin lowering interest rates.
The S&P 500 briefly exceeded 5,000 for the first time during the day on Thursday.
It took the S&P 500 nearly 41 years to reach 1,000, the first major milestone reached on February 2, 1998, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. Ta.
The index dropped to its previous level on April 1, 2021, after the Federal Reserve cut interest rates to near zero, governments injected stimulus money into the economy, and coronavirus vaccines raised optimism for post-pandemic economic growth. We have reached a major milestone of 4,000.
On January 19, the benchmark index achieved a new record for the first time in two years, breaking the previous record high of 4,796.56 set on January 3, 2022. The index has since set new highs six times in January alone.
If the S&P 500 hits a new high in January, there's about a 75% chance it will hit a new high in February, according to Sam Stovall of CFRA Research. When new highs are set in both months, the index returns about 16% on average and ends the year on a high about 88% of the time, he said.
The S&P 500 is up about 5.4% since the beginning of the year. The index rose 24% in 2023, and stocks rallied strongly at the end of the year on growing optimism that the Fed could achieve a soft landing, or curb inflation, without triggering a recession.
Progress to new heights has been very narrow, with most of the S&P 500's gains coming from the so-called “Magnificent Seven”: Nvidia, Microsoft, Meta Platforms, Amazon, Apple, Alphabet, and Tesla.
Shares of Nvidia, Microsoft, Meta Platforms, and Alphabet closed at record levels several times last month.
“When the stock market is rising, ideally there are many sectors and stocks participating,” Scott Wren of Wells Fargo Investment Institute said in a note Wednesday.
Mr. Silverblatt said Magnificent Seven stock returned about 62% of the benchmark index's total return of 26% last year.
