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S&P 500 Index Sets Record High, Thanks to 'AI-Driven Frenzy' and Tech Stocks - Slashdot

Jan 20, 2024 - news.slashdot.org
The S&P 500 index, which tracks 500 of the largest U.S. companies, hit an all-time closing high, closing at 4,839.81, up more than 1% for the day. This surpasses the previous record set in January 2022. The surge in the final quarter of 2023 was driven by evidence that the U.S. economy has not entered a recession, despite the Federal Reserve's interest rate hikes, and an AI-driven frenzy on Wall Street. The index's growth is beneficial for the millions of Americans who invest in it through retirement accounts, with about $5.7 trillion in assets passively indexed to the S&P 500 in 2022.

Tech companies, particularly those associated with artificial intelligence work, led the S&P 500's gains. The "Magnificent Seven" tech stocks - Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta - increased 75% on average in 2023 and represented 30% of the index's total market value at the end of the year. Nvidia, known for its high-performance chips used in AI, had the best year, gaining nearly $190 billion in value overnight. Over the last 12 months, the index has risen 21.83%.

Key takeaways:

  • The S&P 500 index hit an all-time closing high, closing at 4,839.81, surpassing the previous record set in January 2022.
  • Big Tech firms, particularly those associated with artificial intelligence, led the S&P 500's gains. The "Magnificent Seven" tech stocks - Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta - increased 75 percent on average in 2023.
  • Investors in 2022 had about $5.7 trillion in assets passively indexed to the S&P 500 and another $5.7 trillion in funds that use it as a benchmark comparison.
  • The stock market's performance could potentially influence voters' feelings about the economy and affect the 2024 election.
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