S&P 500 closes at record high for first time in two years

By Nicole Goodkind and Krystal Hur, CNN

New York (CNN) — The S&P 500 index closed Friday at a record high, fueled by surging tech stocks and bets that the Federal Reserve will cut interest rates this year.

The benchmark index closed at 4,839.81, besting its previous high of 4,796.56, reached on January 3, 2022.

Earlier in the trading session, the S&P 500 reached an intraday high of 4,832.17, topping its previous intraday high of 4,818.62, reached more than two years ago, on January 4, 2022.

After a rocky start to the year, the S&P 500 has found its footing and is up about 1.5% in 2024.

The benchmark index jumped 24% in 2023, with stocks rallying powerfully at year end as optimism grew that the Fed could achieve a soft landing, or tamp down inflation without triggering an economic downturn.

The Fed projected three rate cuts in 2024 at its last policy meeting of 2023, marking an unexpected turning point in its aggressive crusade against inflation. The central bank also kept rates on hold for the third straight time and signaled that it might be done raising rates.

The blue-chip Dow Jones Industrial Average reached a record high close in December as investors cheered the Fed’s dovish tilt. But the rally stalled to start 2024, as soft-landing optimism started to wane. Treasury yields spiked after falling sharply over the past few months, with the yield on the 10-year note edging above 4%.

Commentary from Fed officials this month had dampened investors’ hopes of a rate cut by March. Atlanta Fed President Raphael Bostic said Thursday he doesn’t believe the central bank will cut rates until the latter half of the year. On Tuesday, Fed Governor Christopher Waller said officials shouldn’t rush cutting rates.

But on Friday, Chicago Fed President Austin Goolsbee cheered investors by saying that the central bank should consider cutting interest rates if inflation continues to fall.

“If we continue to make surprising progress faster than was forecast on inflation, then we have to take that into account in determining the level of restrictiveness,” Goolsbee said on CNBC.

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