The US stock market hits record highs amid a tech surge and optimism

On Friday, US stocks reached unprecedented levels, buoyed by a surge in tech stocks and growing optimism about the economy. The S&P 500 index, representing major American companies, closed at 4,839.8, a 1.2% gain, surpassing the previous record established in January 2022 and marking a full recovery from the downturn two years ago.

The rebound is a stark contrast to concerns in the past, when markets fretted over inflation and economic responses. As inflation eases and fears of an economic downturn diminish, investors have re-entered the stock market. The Dow Jones Industrial Average, reflecting the economy’s representative firms, hit a record late last year and rose another 1% on Friday. The Nasdaq, housing many tech companies, surged 1.7%, although it remains approximately 4% below its 2021 peak.

For Wall Street, the S&P’s new record solidifies the current period as a bull market, with shares recovering 35% from the October 2022 low. Investors are optimistic about the US central bank potentially reversing its interest rate strategy later this year, easing borrowing costs, and lifting the economy.

Tech companies, fueled by expectations of artificial intelligence advancements, have contributed to the positive market sentiment. The positive outlook extends beyond investors, reaching the public, who witness recovery in retirement and investment accounts, along with reduced gas prices and easing inflation.

The University of Michigan’s consumer sentiment survey reported a significant boost in mood, reaching the highest level since 2021, up more than 21% from a year ago. The survey attributes consumer confidence to the belief that inflation is under control and anticipates strengthening income expectations. This surge in sentiment, the largest two-month increase since 1991, reflects a broader positive trend, aligning with the ongoing recovery from recessionary impacts.