The S&P 500 index tracks 500 of the largest companies listed on U.S. stock exchanges, according to Wikipedia. And Friday that index "hit an all-time closing high," reports the Washington Post, "reflecting the staggering gains of a coterie of Big Tech firms against the backdrop of a surprisingly stable economy."
The broad-based index closed at 4,839.81 — up more than 1 percent for the day — surpassing the previous closing record set in January of 2022. The stock market surged upward in the final quarter of 2023 as evidence gathered that the [U.S.] economy has not tipped into recession territory, despite the Federal Reserve’s campaign to raise interest rates. At the same time analysts point to an AI-driven frenzy on Wall Street that rivals the dot-com boom of the late ’90s, when investors sought to capitalize on the transformative gains brought by the early internet. A booming S&P 500 is a welcome sign for the millions of Americans who invest in the index through retirement accounts. Investors in 2022 had about $5.7 trillion in assets passively indexed to the S&P 500 and another $5.7 trillion in funds that use it as a benchmark comparison, according to S&P Global. Voters’ feelings about the stock market and economy could affect the 2024 election… Tech companies, including a few names heavily associated with artificial intelligence work, led the S&P 500’s gains. Seven of the largest tech stocks known as the "Magnificent Seven" — Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta — increased 75 percent on average in 2023 and represented 30 percent of the index’s total market value at the end of 2023. "AI is the new dot-com," said Michael Farr of Farr, Miller and Washington. "It’s the new magic that is going to change the world that we don’t really understand yet. But we all understand it’s very powerful." Those seven stocks made up around half of the S&P 500’s growth last year. Nvidia, whose high-performance chips have become popular for AI uses, had the best year of the bunch, at one point gaining nearly $190 billion in value overnight, a 24 percent gain. In the last 12 months, the index has risen 21.83%. The article notes that "Although the rest of the market has lagged Big Tech, analysts say promising economic data from recent months has boosted optimism about the broader economy."
Read more of this story at Slashdot.
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{URL}https://news.slashdot.org/story/24/01/20/041234/sp-500-index-sets-record-high-thanks-to-ai-driven-frenzy-and-tech-stocks{/URL}
{Author}EditorDavid{/Author}
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{Source}Slashdot{/Source}
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