Big tech companies like Nvidia, Apple, Microsoft, Meta, Amazon and Alphabet reported strong earnings, driving up their stock prices|Moodman|Giphy
The S&P 500 closed above 5,000 points for the first time ever on Friday, reflecting investors’ confidence in the US economy amid constant rate hikes by the Federal Reserve. As the most widely tracked index globally, investors rejoiced at data showing easing inflation.
The landmark moment comes when the US is seeing strong economic growth, a better-than-expected earnings season, and anticipates rate cuts.
The S&P 500 tracks the performance of America’s biggest companies, but it’s the largest tech stocks that mostly contributed to the gains as investors claim artificial intelligence (AI) played a significant role, which has become a driving force behind market momentum.
Investors also share a bullish sentiment. When the index hit 1,000 points for the first time in 1998, the subsequent 12 months saw it climb 26%.
Factors behind the rally
Big tech companies like Nvidia, Apple, Microsoft, Meta, Amazon and Alphabet reported strong earnings, driving up their stock prices.
Other companies, including Disney, Ford, and Chipotle, also beat analyst expectations, boosting investor confidence.
Furthermore, oil futures saw a rise, Bitcoin prices climbed, and Treasury yields saw a modest uptick.
The rally is also linked to expectations that the Federal Reserve will lower interest rates later this year as inflation slows down.