U.S. markets and stock exchange traded funds jumped Thursday, with the S&P 500 passing the 4,000 mark for the first time, as technology stocks took the lead.
On Thursday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 1.6%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) rose 1.6%, and iShares Core S&P 500 ETF (NYSEArca: IVV) was 0.9% higher.
The S&P 500 moved to 4000 from 3000 in just 434 trading days, its shortest gap between 1000 points in the index’s history, the Wall Street Journal reports. In comparison, it took 1,227 trading days for the benchmark to go to 3000 from 2000.
“There’s always some excitement starting a new quarter,” Lindsey Bell, the chief investment strategist at Ally Invest, told the WSJ, noting that having the S&P cross a milestone is another confidence booster. However, she warned that “lots of times the market has to test that level a few times before it can go higher.”
Nevertheless, investors are hopeful of further gains in the equity markets, pointing to the economic growth amid widespread vaccinations, aggressive spending programs from the Biden administration, and improving earnings expectations. On the other hand, there are risks remaining from rising bond yields, lockdowns in Europe, and signs of overpriced corners of the market.
“We’re still bullish for this year, and we think that with stimulus, with the Fed committed to being dovish, with the economy reopening due to more of the U.S. getting vaccinated, overall you’re going see corporate earnings do pretty well,” King Lip, chief investment strategist at Baker Avenue Asset Management, told Reuters.
Shawn Snyder, a strategist at Citi U.S. Wealth Management, cautioned that with the economy back on track, investors have “Covid jitters,” looking warily at inflation expectations and the potential reversal of the Federal Reserve’s loose monetary policy.
“We’re exiting this Goldilocks situation [for stocks]and wondering if the porridge is too hot,” Snyder told the WSJ.
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