On Friday, shares in the United States surged to new heights, propelled by the strength of tech stocks and growing optimism about the economy. The S&P 500 index, which monitors the

performance of the largest American companies, concluded the day with a 1.2% gain, closing at 4,839.8 and surpassing the previous record set in January 2022.

This record-breaking achievement signifies a robust recovery from the downturn experienced two years ago when market concerns about inflation and economic responses dominated. Now, with a subsiding inflationary environment and diminishing worries about an economic downturn, investors have eagerly returned to the stock market.

The Dow Jones Industrial Average, representing firms considered indicative of the economy, had previously rebounded to reach its own record late last year as optimistic investors actively purchased shares. On Friday, it climbed 1%, achieving another new high.

The Nasdaq, where numerous tech companies are listed, experienced a 1.7% surge, though it remains around 4% below its peak in 2021.

For Wall Street, the latest record-setting performance by the S&P 500 firmly establishes the current period as a bull market, with shares rebounding by 35% from the low point in October 2022.

Investor optimism has been fueled by expectations that the US central bank, which had raised interest rates significantly in 2022 to curb economic growth and control inflation, may soon declare victory and potentially reverse course later this year. Such a move would reduce borrowing costs, alleviating economic pressures on companies. Simultaneously, the anticipated rate cuts would redirect investors away from interest rate-tied investments toward stocks, providing an additional boost to stock prices.

Tech companies have also enjoyed an upswing, buoyed by prospects of artificial intelligence advancements driving new growth.

This positive sentiment is extending beyond financial markets to the general public, who have witnessed the recovery of retirement and investment accounts alongside declining gas prices and moderating price increases in other goods. The University of Michigan's monthly survey of consumer sentiment, a closely watched indicator, reported this month's sentiment to be the highest since 2021, representing an increase of over 21% from a year ago.

According to the survey, consumer views are supported by the confidence that inflation has turned a corner, coupled with strengthening income expectations. The survey highlighted a cumulative 29% increase in sentiment over the past two months, marking the most substantial two-month surge since 1991, coinciding with the end of a recession. Photo by bfishadow on Flickr, Wikimedia commons.