S&P 500 index ends above 5,000 for first time in history as big tech stocks continue to rally

The S&P 500 index closed above 5,000 for the first time on Friday afternoon as tech stocks rallied and hopes grew that the Federal Reserve would eventually cut interest rates.

This famous index tracks the performance of the 500 largest publicly traded companies in the United States and provides a perception of the health of the economy.

The companies leading the way are primarily tech giants, buoyed by last year’s hype around artificial intelligence, many of which reported strong financial results for the previous quarter this week.

Chipmaker Nvidia received a boost Friday with reports that it is building a new business unit focused on designing custom AI chips for cloud computing companies.

The S&P 500 closed above 5,000 for the first time Friday afternoon.

Chipmaker Nvidia is among the tech stocks that led the S&P 500’s rise thanks to hype around AI.

The continued rally that took the S&P to the 5,000 level began in late October. Pictured is the S&P 500 index over the past 5 months.

Expectations that the Fed will soon lower record-high interest rates also contribute to the belief that more economic growth is on the horizon.

Doing so would reduce the high borrowing costs currently faced by both businesses and consumers and increase the amount of cash in circulation in the economy.

And while the index’s passing above the milestone is fundamentally good news for U.S. businesses, it will also benefit millions of ordinary Americans.

“This translates into gains in investment accounts and, most importantly, returns in mutual funds and ETFs that track indexes, leading to increased retirement savings,” said Mark Hamrick, senior economic analyst at Bankrate. .

He added, “This record rally is fueled by enthusiasm for big technology companies, premised on hopes for artificial intelligence amidst the resilience of the U.S. economy to support corporate earnings.”