S&P 500 reaches toward 6,000 as stocks hit new highs
It’s quietly been another stellar year for stocks.
Stocks poised to benefit from the continued strength of the US economy drove major market indexes to new highs Wednesday, with the S&P 500 notching another record high at close.
Parts of the market made up of such “cyclical” stocks — so-named because their prices mirror the ups and downs of the economic cycle more than others — led the gains.
It stands to reason. You can’t swing a dead cat without striking a piece of favorable economic news lately. The job market is good. Corporate profits are at a record. The Fed has started cutting interest rates. And inflation is cooling, with analysts expecting the headline consumer price index for September — set to be announced tomorrow at 8:30 a.m. ET — to hit 2.3%, the lowest since early 2021.
Financial bellwethers Visa, Mastercard, and JPMorgan Chase (which kicks off earnings season with other banks Friday) helped make the financial sector of the S&P 500 the top-performing part of the index by early afternoon Wednesday, while tech giants Apple, Microsoft, and Amazon were the biggest contributors to day’s gains for the S&P, according to FactSet data.
Overall, the tech-heavy Nasdaq component lagged on the day, due in part to a sell-off in Alphabet shares after the Department of Justice suggested a breakup of the company could be part of the legal remedies after a federal judged deemed its search monopoly illegal. Google was the single biggest drag on the market today, per FactSet.
Shares of defensive stocks, such as utilities, where investors tend to hunker down during tough economic times, were the worst-performing part of the S&P 500.
Taking a step back, it’s worth noting that it’s quietly turned into a pretty great year for the stock market, with the S&P 500 up more than 21% in 2024. In fact, since 2022, when inflation — and Fed rate hikes — crushed the markets and sent the S&P 500 down nearly 19.5%, the blue chip index is up over 50%.
The ride has pushed the next big, round number firmly into view for investors, with the S&P 500 now inching closer to the never-before-seen level of 6,000, which would be a nice, juicy target for Wall Street as we push toward the end of the year.
