Reporting from New York
The widely followed S&P 500 index, which monitors the performance of large corporations in the United States, has achieved a new milestone. For the first time, it closed above the 5000 point mark, ending the day at 5026.58 points. This represented a daily increase of 0.5 percent, illustrating the ongoing strength of the US stock market.
In other market developments, the Dow Jones Industrial Average, which also tracks large companies, fell by 0.2 percent on Friday. Meanwhile, the tech-heavy Nasdaq Composite Index rose by 1.2 percent, signalling the continued resilience and growth of the technology sector.
The S&P 500 had already flirted with the 5000 point level on Thursday, but ended up just short of this milestone. This brief brush with history was, however, an indication of the index’s upward trajectory.
The S&P 500 index has been on a consistent upward trend for the last five weeks. In fact, since October, there’s been only one week where the index didn’t post gains. This has resulted in the index more than doubling its value since the market crash triggered by the onset of the global pandemic in spring 2020.
The last time the S&P 500 traded below 4,000 points was a year ago, towards the end of November. It first broke the 4000-point barrier in April 2021, showing the rapid pace of its recovery and growth.
The remarkable increase in the index has been largely driven by the robust performance of the technology sector. Giant megacap companies, such as Google’s parent company Alphabet and chipmaker Nvidia, have been particularly influential. Both companies saw their stock prices rise by more than two percent.
Despite Federal Reserve Chairman Jerome Powell indicating that interest rate hikes may be on the horizon, the stock market continues to surge. Powell suggested that these increases aren’t likely to occur until March at the earliest.
Overall, market sentiment remains bullish. Positive inflation figures and a solid economic backdrop are providing a boost to share prices. While some slowdown in the US economy is anticipated, a full-blown recession is not expected.
Corrected data on annual US inflation was released on Friday. The monthly rate of inflation for December was revised down slightly, from 0.3 percent to 0.2 percent. However, inflation figures for the last quarter remained unchanged, with prices rising at an annual rate of 3.3 percent.
The ongoing earnings season has also had a positive impact on the stock market. According to information service LSEG, of the 332 S&P 500 companies that have reported their results so far, an impressive 80.7 percent have beaten analyst expectations. This is above the average of the last four quarters, where 76.4 percent of companies outperformed forecasts.