The S&P 500 rose Wednesday and approached the 5,000 levelposting a higher close as investors analyzed another slab of quarterly results that signaled a booming economy.
The broad-based index, which topped the 4,000 level for the first time in April 2021, added 0.82% to close at 4,995.06. At session highs, the S&P hit 4,999.89.
The Nasdaq Composite marked a jump of 0.95% to 15,756.64 units, while the Dow Jones Industrial Average gained 156 points, or 0.4%, to close at 38,677.36 and an all-time high.
“It’s driven by earnings, but it’s bleeding into other companies that may not have announced,” Kim Forrest, chief investment officer at Bokeh Capital, said of Wednesday’s moves. “They’re sweeping the coats. Some of what we’re experiencing this year is people don’t want to be left behind like they were last year.”
The S&P 500 is approaching the 5,000 level
Stocks rose as investors weighed a fresh batch of strong corporate earnings and major tech giants continued their rally. Nvidia and Microsoft rose about 2% to trade at new highs, while Meta Platforms rose 3.3%. Alphabet and Amazon were up about 1% each.
Enphase Energy fell about 17% after the solar company said its stock glut may be bottoming out, bolstering sympathy for other solar stocks. Passage gained 6% after beating Wall Street estimates for the fourth quarter and issuing higher-than-expected guidance, while Chipotle Mexican Grill was up 7% on strong earnings and traffic.
A better-than-expected earnings season, combined with upbeat guidance, has been a source of strength for the market in recent weeks, showing that consumer spending is healthy and the economy remains resilient in the face of high interest rates.
“The good news is in, and the US economy continues to show incredible strength,” said Nancy Curtin, chief investment officer at AlTi Tiedemann Global. “At the same time, we continue to see signs of deflation” and “sticky growth,” which is “a positive scenario for the Fed to cut interest rates at some point this year.”
The rise comes despite a recent cut in expectations for interest rates in 2024 following cautious comments from the central bank. Fed Chairman Jerome Powell noted last week that investors would have to wait longer than previously thought for a turnaround, while Minneapolis Federal Reserve Bank President Neil Cascari said Wednesday he expects only two to three rate cuts interest rates this year.
Wednesday’s price move may be a sign that investors are “more comfortable” with the idea of later-than-expected rate cuts, Goldman Sachs chief executive Chris Hussey said in a note to clients.
In other news, New York Community Bancorp Shares rose 6.7% after another choppy session after Moody’s downgraded its credit rating to junk. Shares have fallen about 31% in February alone after the bank posted a surprise fourth-quarter profit and cut its dividend amid mounting losses in commercial real estate.
Walt Disney, PayPal and Arm Holdings is scheduled to report quarterly results after the market closes.