The S&P 500 index surged to a new all-time high on Tuesday, breaking through the 5,000 barrier for the first time in history as corporate earnings continue to exceed analyst expectations across multiple sectors.
The benchmark index closed at 5,012.45, marking a 1.2% gain for the session and extending its year-to-date advance to nearly 4%. The milestone comes as fourth-quarter earnings reports from major corporations have largely beaten Wall Street estimates, fueling investor optimism about the economy's resilience.
Technology Leads the Rally
Technology stocks led the advance, with the sector gaining 2.1% on the day. Major tech companies including Apple, Microsoft, and Nvidia all posted significant gains as investors positioned themselves ahead of upcoming earnings reports.
"The market is being driven by a combination of strong earnings, moderating inflation, and expectations that the Federal Reserve may begin cutting rates later this year," said Jennifer Martinez, chief market strategist at Goldman Sachs.
Breadth Improves
Unlike previous rallies that were concentrated in a handful of mega-cap stocks, this advance has shown broader participation. More than 400 stocks in the S&P 500 traded higher on the day, suggesting healthy market internals.
Small-cap stocks also joined the rally, with the Russell 2000 index gaining 1.5%. This broadening of market leadership has been welcomed by analysts who had expressed concern about the narrow nature of last year's gains.
Trading volume was above average, indicating strong conviction behind the move. The CBOE Volatility Index (VIX), often referred to as Wall Street's fear gauge, fell to its lowest level since early 2024.