The S&P 500 soared past the 5,000 level for the first time on Friday, marking yet another milestone for Wall Street. This comes as U.S. stocks continued their winning streak, with the index closing at a new record high. The Nasdaq composite also experienced a significant jump, coming within 0.4 percent of its all-time high. However, the Dow Jones Industrial Average lagged behind, slipping by 0.1 percent.
While milestones like the S&P 500 reaching 5,000 may not hold much weight for a market driven by hard numbers, they can certainly boost market sentiment. The current rally on Wall Street took off due to hopes of cooling inflation, which could lead the Federal Reserve to cut interest rates. However, reports consistently show a robust economy, delaying the expected rate cuts. Nevertheless, solid economic performance has raised expectations for strong corporate profits, which has supported stock prices.
Big Tech stocks, including Nvidia, Microsoft, and Amazon, played a major role in driving the market’s gains. These companies, fueled by the hype around artificial intelligence technology, lifted the S&P 500 after each experiencing significant increases. However, Pepsi saw a 3.6 percent drop in its stock price due to weaker-than-expected revenue for the latest quarter. The company attributed this slowdown to customers returning to pre-pandemic behaviors.
While most companies in the S&P 500 have reported better-than-expected profits this earnings season, some have expressed concerns about the market becoming too expensive. Traders are increasingly flocking to riskier investments, leading a measure by Bank of America to lean towards sell rather than buy. This measure tracks market sentiment and previously signaled a buying opportunity when fear was high in October.
In global stock markets, indexes were mostly lower, with several Asian markets closed for the Lunar New Year holiday. Tokyo’s Nikkei 225, however, edged up by 0.1 percent, hitting a 34-year high earlier in the day.
Despite dimming expectations for rate cuts, the stock market continues to hit record highs, which indicates a less emotionally driven market. However, investors are encouraged to remain cautious and avoid complacency during this strong and steady bull run.
Overall, Wall Street’s latest record-breaking milestone underscores the ongoing strength of the stock market, driven by strong corporate profits and investor optimism.
Reference:
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