U.S. stock market hits new heights: The S&P 500's record-breaking run

NEW YORK, NEW YORK - JANUARY 17: Traders work on the floor of the New York Stock Exchange during afternoon trading on January 17, 2024 in New York City. The stock market closed with a loss for the second straight day following the release of stronger-than-expected U.S. economic data from the Commerce Department. (Photo by Michael M. Santiago/Getty Images)
NEW YORK, NEW YORK - JANUARY 17: Traders work on the floor of the New York Stock Exchange during afternoon trading on January 17, 2024 in New York City. The stock market closed with a loss for the second straight day following the release of stronger-than-expected U.S. economic data from the Commerce Department. (Photo by Michael M. Santiago/Getty Images)
Images source: © GETTY | Michael M. Santiago

8:36 PM EST, January 23, 2024

In a remarkable display of resilience, the S&P 500 Index has posted a second consecutive record high, signaling robust confidence among investors in the U.S. stock market. This achievement not only underscores the ongoing bullish trend but also points to the evolving dynamics in the global financial landscape.

A Surge Led by Technology

Tech stocks have been at the forefront of this upward trajectory, contributing significantly to the S&P 500's gains. Major companies like Netflix, Tesla, Abbott Laboratories, Intel, and Johnson & Johnson have been pivotal in this rise, with their recent performance drawing keen interest from investors. The anticipation of their corporate reports is high, as these are expected to provide valuable insights into this year's profit outlook. The impact of these tech giants is so profound that Quincy Krosby, the chief global strategist at LPL Financial, emphasized that "the earnings and guidance are going to be crucial to continue underpin the mega tech force in the market."

Semiconductors and the Tech Index Shine

The semiconductor index, a crucial segment within the tech sector, has also hit an all-time high, further bolstering the tech-driven surge in the market. Companies like Nvidia have mirrored this trend, achieving new records themselves. The overall S&P 500 technology index experienced a notable increase, underscoring the sector's substantial influence on the broader market.

Economic Indicators and Future Expectations

Investors are now turning their attention to upcoming economic reports, such as the personal consumption expenditure (PCE) index, S&P Global PMI readings, and an advance fourth-quarter GDP print. These reports are anticipated to offer clues about the U.S. central bank's forthcoming policy decisions. According to Matt Stucky, chief portfolio manager for equities at Northwestern Mutual Wealth Management Company, the market's confidence is fueled by the strength seen in the initial weeks of the year, backed by robust consumer activity.

Shifting Expectations and Market Adjustments

In an interesting turn, traders have adjusted their expectations regarding the timing of interest rate cuts, now focusing more on May than March. This recalibration reflects the market's ongoing adaptation to both economic indicators and Federal Reserve policies.

Challenges Amidst Success

Despite the overall market success, not all news has been positive. Archer-Daniels-Midland, a key player in the market, experienced a significant decline in its share value following issues with its CFO and a revision of its full-year profit forecast. Similarly, Gilead faced setbacks with its drug, Trodelvy, impacting its stock value.

This period marks a significant phase in the U.S. stock market, characterized by technological dominance and strategic shifts in investor expectations. As the market continues to navigate through economic indicators and corporate performances, it remains a focal point of global financial attention.

Sources: Reuters, TradingView News, Malay Mail, Zee Business

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