Record Growth
The S&P 500 index surged by an impressive 10.16% in the initial quarter of 2024, culminating in a closing score of 5,254.35 points. Echoing this explosive growth, the SPDR S&P 500 Trust ETF (SPY) mirrored the index’s performance with a robust increase of 10.06% over the same period.
Milestones Achieved
This remarkable performance marks the index’s most substantial first-quarter gain since Q1 of 2019. Throughout the quarter, the S&P 500 accomplished notable milestones, such as smashing through the 5,000-point barrier for the first time ever on February 8. Subsequently, the index pushed past the 5,100 and 5,200 levels on February 23 and March 20, respectively. Presently, the S&P 500 is basking in the glow of an all-time high.
Bullish Performance
In a display of unparalleled strength, 40% of the trading days in the first three months of the year marked record closing highs for the index. One must harken back nearly a decade to find a period where the S&P 500 index displayed such vigor, including the consecutive quarterly growth in double digits. Despite Real Estate being the only exception, all eleven sectors of the S&P 500 closed the quarter in positive territory.
Sector Standouts
The Communication Services sector led the charge with an impressive gain exceeding 15%, closely trailed by Energy and Information Technology sectors, both boasting gains of over 12%. The driving force behind this bullish start for the broader index can be partly attributed to the Federal Reserve’s shift towards a dovish monetary policy at the end of 2023, along with multiple interest rate cuts.
Future Forecast
As investors eagerly eye the sustainability of these gains, Wells Fargo analyst Christopher Harvey projects continued upside momentum in equity prices in the foreseeable future. Historical trends also suggest that strong first-quarter returns often set the stage for further gains by year-end. With the potential initiation of interest rate cuts as early as June, stocks appear poised for continued uptrend in the second quarter.
Optimistic Outlook
Goldman Sachs has even entertained the idea of the S&P 500 index cresting to 6,000 by the year’s conclusion, indicating potential gains nearing 15%. While the future remains uncertain, the groundwork laid in the first quarter instills confidence in the market’s trajectory for the rest of the year.
The views and opinions expressed herein reflect those of the author and not necessarily Nasdaq, Inc.
