This week, the American markets caught a taste of a new bullish milestone that can keep investors hooked for the long run. On Thursday’s trading day, the S&P 500 briefly touched the 5,000 level as it continues to make new record closing highs. As the index that tracks the performance of the 500 largest American companies, the S&P 500 has been regarded as one of the best gauges to capture the behavior of the American corporate world. Just in March 2021, the S&P 500 reached 4,000, with it then falling beneath 3,600 again during 2022’s bear market. Since its recent low in October 2022, the S&P 500 has delivered a return of 40%, enticing those investors who do not want to miss out on the chance of reaping the gains from a bull market.
What has led the recent market movement to the 5,000 level has been corporate earnings, with earnings season more than halfway through and showing promising results. So far, 64% of S&P 500 companies have reported earnings, with 81% of those surpassing earnings forecasts and 63% beating revenue expectations. Interestingly, market sentiment throughout the past few years has relied heavily on the change of interest rates, but now analysts like Binky Chadha from Deutsche Bank believe earnings will now take the throttle to fuel the S&P. Despite previous pricing suggesting an early rate cut in March, the change in attitude by the Fed had virtually no drastic effect on the market bloated with strong earnings figures. Strong economic data, such as that of the labor market, has continued to promote the idea of robust economic growth. This week, jobless claims fell 9,000, slightly hotter than what forecasts suggested. As the year continues, investors could analyze what is driving markets to make decisions on where to place their hard-earned dollars.