The S&P 500 index briefly touched the 6000-point mark, driven by significant gains in large-cap growth stocks sensitive to interest rate changes. This rise reflects market optimism about reduced borrowing costs and a potential soft landing for the U.S. economy.
The Federal Reserve cut interest rates for the first time in four years this September, followed by an additional 25 basis point reduction in November. Traders, as per CME FedWatch data, anticipate another rate cut this year.
Technology stocks, particularly from companies like Nvidia (NVDA, Financial), significantly contributed to the S&P 500's ascent. Remarkably, the index climbed from 5000 points in early February to 6000 points in about nine months. In contrast, it previously took nearly three years to move from 4000 points in April 2021 to 5000 points.
While many major brokerage firms predict the S&P 500 will close the year below 6000 points, Evercore ISI is optimistic about the index ending the year at this level.
