Stocks roar in 2024 as the S&P 500 closes at an all-time high – amid optimism the Fed will soon start cutting interest rates
- Markets fell early this year after making substantial gains in 2023
- The S&P 500 index tracks the 500 largest companies in the US
- All three major averages now appear to be in positive territory for 2024
The S&P 500 closed at an all-time high on Friday – its first high in more than two years.
The index, which tracks the 500 largest companies in the US, rose 1.23 percent to 4,839.81, fueled by surging technology stocks and optimism that the Federal Reserve will soon start cutting interest rates.
It marked the benchmark index’s first high since closing at 4,796.56 on January 3, 2022.
The Dow Jones Industrial Average also added 1.05 percent, or 395.19 points, and the Nasdaq rose 1.70 percent.
All three major averages now appear to be in positive territory for 2024 after the market stumbled at the start of the year.
The S&P 500 closed at an all-time high on Friday – its first high in more than two years
Most 401(K) accounts have their money invested in whole or in part in the major benchmark indices, meaning that when they rise, Americans’ retirement savings get a boost.
After significant losses in 2022, markets roared back in 2023, with the S&P 500 rising 24 percent.
The so-called Magnificent 7 technology companies – Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla – accounted for about two-thirds of the profits.
But after the S&P 500 posted a record late last year, Wall Street started 2024 with a slump as several tech stocks saw sharp declines.
Concerns about iPhone sales prompted analysts to downgrade Apple’s stock price, causing shares to fall and putting pressure on the U.S. stock market.
But investors have started buying leading tech stocks again in recent days.
All three major averages now appear to be in positive territory for 2024 after the market stumbled at the start of the year
In particular, shares of chip makers rose Friday amid booming demand for high-quality chips used in artificial intelligence. Nvidia climbed 4.2 percent and Advanced Micro Devices rose more than 7 percent.
Microsoft and Apple, the two most valuable companies in the world, both rose by more than 1 percent.
The rally was also driven by expectations that the Fed could start cutting rates as early as March after its aggressive campaign of rate hikes.
While investors are divided, traders in the Fed funds futures market now see a 52 percent chance of a rate cut in March, according to CME Group’s FedWatch Tool.
The rally was fueled by optimism that the Federal Reserve will cut interest rates later this year
Stock investors were also cheered Friday by preliminary research from the University of Michigan, which showed consumer confidence improved in January to the highest level since summer 2021.
“Records are there to be broken and the broadening of market action in recent months is reassuring,” said Carol Schleif, chief investment officer at BMO Wealth Management.
“The resilience of the U.S. economy in general, and most businesses in particular, is remarkable.”