NEW YORK • America’s dominant stock market index, the Standard & Poor’s 500, has passed the threshold of 2,500 for the first time in its 60-year history.
Wall Street is riding the second-longest bull market in history, with investors repeatedly shrugging off domestic and international turmoil as they pile into shares of technology and other companies.
On Friday, for example, the rally continued despite news that North Korea had launched its second missile in a month over Japan. Instead, the market focused on strong performances of tech stocks.
S&P’s bellwether stock index spent much of the day flirting with 2,500. In the final moments of the trading day, investors nudged the benchmark to 2,500.23, up nearly 5 points on the day. The milestone came less than four months after it closed above 2,400, and brought 2017’s gain to nearly 12 per cent.
Other indexes, including the Dow Jones Industrial Average, also closed at record highs.
Behind the recent rally are at least two trends. First, the technology sector has been on a tear, with investors racing to get a piece of companies that could become the next Apple or Google.
Among Friday’s biggest winners was Nvidia, a chipmaker in California. Its shares rose 6.3 per cent, or US$10.71, to US$180.11 after its leadership in artificial-intelligence development was lauded.
Second, the extended period of ultra-low interest rates has been a boon. The question is how long that will continue. Traders will monitor the Federal Reserve’s meeting this week for any signs about its intentions. Inflation rose last month, increasing the likelihood that the Fed will lift rates by the end of the year.
While the stock-buying spree continues, the market’s upward march has left some investors nervous that a geopolitical crisis or a sudden bout of bad financial or economic news could spark a downturn.
“It doesn’t appear to be alarmingly overvalued, but it’s possible things have gone too far,” said Mr Paul Ashworth, chief US economist at Capital Economics.
“They seem to be looking past the economy. They want nothing to rain on their parade,” economist Joel Naroff said in a commentary.
The S&P index has gained nearly 270 per cent since March 2009, when the last bear market ended. The longest bull market lasted for roughly a decade between 1990 and 2000.
The Dow closed at 22,268.34, rising 0.29 per cent, or 64.86 points. The Nasdaq composite closed up 0.3 per cent, or 19.38 points, at 6,448.47.