The S&P 500 closed over 4,000 on Thursday for the first time, having nearly doubled its coronavirus pandemic low of 2,192 in just over a year.
Why it matters: "Round numbers can be big psychological barriers for markets, so breaking 4,000 could provide a confidence boost to stocks in the short term," Lule Demmissie, president of Ally Invest, says in a note.
- "And we think the market has room to run longer-term, too. We’re seeing signs of confidence in the options market as the S&P 500 approaches new highs," she adds.
- "It’s an exciting milestone for U.S. stocks, which are back at record highs thanks to a third round of fiscal stimulus, COVID vaccinations, and Federal Reserve support."
Between the lines: The Cboe's volatility index (VIX) has declined significantly, "dancing below 20" and even hitting a 52-week low below 18 — a level it hasn’t consistently closed below since the March downturn, Demmissie notes.
Where it stands: The S&P hit 3,000 for the first time in July 2019. It has taken less than seven years to double after reaching the 2,000 mark in August 2014, as Axios' Ivana Saric notes.
- It took the index over 16 years to double from the 1,000 point mark, which it first hit in February 1998.
Watch this space: Tech stocks continued to mount a comeback after struggling in the first quarter. The Nasdaq jumped thanks to a big run-up in chip stocks, with the PHLX Semiconductor Index rising 3.7%.
The big picture: Asset managers and economists continue to be bullish on the stock market and the economy, as money further piles into equities.
- Data from the Investment Company Institute show equity funds have seen net inflows for the past four weeks in a row and in six of the past seven weeks, including the two highest weeks of inflows to stock funds on record.