S&P 500 Hits Record High Amid Strong Consumer Sentiment

The S&P 500 reached an all-time high on Friday as investors surged into big tech stocks following upbeat consumer sentiment data and easing inflation expectations. The market saw significant gains, with the S&P 500 rising by 1.2% to close at a record level of 4,839.81 by 16:00 ET (21:00 GMT). The Dow Jones Industrial Average also climbed by 1.1%, while the NASDAQ Composite surged by 1.7%.

Big tech giants like Apple, Google, Microsoft, and Meta are making massive gains and leading the investment. These giants are continuing to move towards their growth with the potential of driving high with increasing demand for artificial intelligence. According to UBS, the US information technology sector is preferred within US equities because of its quality tilt and potential of having a great demand for Artificial Intelligence in the market.

Chip stocks also witnessed a rise, with NVIDIA Corporation and AMD which increased by 4% and 7%, respectively. Super Micro Computer Inc also jumped to a record high after irs full-year outlook, which cited a strong demand by AI technology.

The bullish sentiment was further bolstered by encouraging data on consumer sentiment and inflation. The University of Michigan’s preliminary consumer sentiment index for January surpassed expectations, reaching its highest level since July 2021. Additionally, inflation expectations for both one-year and five-year periods eased, providing relief to investors.

The positive economic indicators, coupled with expectations for a March rate cut dropping below 50%, contributed to keeping Treasury yields in check.

In the corporate sector, Macy’s announced plans to cut jobs and close locations in an effort to streamline its business and reduce costs, leading to a 1.6% decline in its stock. On the other hand, Wayfair Inc surged over 10% after announcing a workforce reduction as part of its business revamp strategy.

Spirit Airlines Inc witnessed a significant surge in its stock price, jumping over 17%, after raising its fourth-quarter revenue outlook due to increased holiday-driven travel demand. The budget carrier also reiterated its support for the merger with JetBlue Airways Corp, despite the Department of Justice’s decision to block the tie-up.

However, energy stocks lagged behind the broader market as oil prices experienced fluctuations, ultimately settling lower on Friday. Despite eking out a weekly gain, oil prices faced downward pressure due to geopolitical tensions, disruptions in US oil production caused by a winter storm, and fluctuations in demand.

Overall, the record-breaking performance of the S&P 500 underscored the market’s resilience amid positive economic indicators and continued investor optimism in the technology sector.