- The S&P 500 finally hit the milestone 5,000 level for the first time on February 8
- Wall Street investors see promise as they pore over US companies’ earnings
- Confidence is growing the Federal Reserve will cut record-high interest rates
The S&P 500 hit a record high of 5,000 towards the end of trading on Thursday but dipped below to 4,998 just as the markets closed.
The influential index tracks the performance of the 500 largest public companies in the US and provides a loose measure of the country’s broader economy.
Blockbuster profits from the likes of Amazon, Meta and NVIDIA in recent days have helped convince investors that the US has avoided a recession and Americans are ready to spend.
On Thursday, stocks that moved the needle included chip maker and NVIDIA rival Arm Holdings, which gained 48 percent after better-than-expected earnings.
The S&P 500 on Thursday hit a record high of 5,000. Pictured is a trader at the New York Stock Exchange dribbling a basketball
‘It will be a good headline, but in perspective, it’s another stop on this ridiculous rally that we’ve seen,’ said Jay Woods, chief global strategist at Freedom Capital Markets, as reported by CNBC.
‘I think the market is tiring, this rally is tiring,’ he added.
The ongoing rally that brought the S&P to the 5,000 level started in late October, when the expectation that high interest rates may finally come down caused the price of government bonds to rise.
Growth has also been driven by a group of technology stocks known as the ‘Magnificent Seven’ – many of which boomed last year thanks to hype around AI.
This year, overall strong earnings for corporate America have been paired with continued expectations that the Federal Reserve is will indeed finally reduce benchmark interest rates.
Doing so would reduce the high cost of borrowing American consumers and companies currently face, injecting the economy with more money and poising it for further growth.
Big companies have this week reported big profits.
The Walt Disney Co. jumped 12.9 percent after it reported larger profits for the latest quarter than analysts expected. It benefited from cost cuts and growth at its theme parks.