S&P 500 zooms past 6,000 for the first time on Trump euphoria

By Lisa Pauline Mattackal

Nov 8 (Reuters) - The S&P 500 .SPX zoomed past the psychologically significant 6,000 mark for the first time on Friday, building on a sharp rally after Donald Trump won a second term as U.S. president.

All three major indexes surged to record highs on Nov. 6 following the election results as analysts expect corporations to benefit from Trump's plans to cut taxes and reduce regulations.

S&P 500 futures ESCV1 had crossed the 6,000 mark on Nov. 7.

The benchmark index has rallied more than 25% this year, steadily gaining since the end of the previous bear market in October 2022.

The sharp gains in 2024 were largely powered by a steep rise in rate-sensitive megacap growth stocks on hopes of lower borrowing costs and optimism around a soft landing for the U.S. economy.

The Federal Reserve cut rates for the first time in four years in September, followed by a 25 basis point cut in November. Traders are pricing in one more reduction this year, as per CME FedWatch.

Information technology stocks .SPLRCT fueled the rise on the S&P 500, led by companies such as AI leader Nvidia NVDA.O.

The index took just about nine months to add 1,000 points after hitting the 5,000 mark in early February. In contrast, it took nearly three years for the S&P 500 to climb from 4,000 in April 2021 to 5,000.

The equity rally, however, has stretched valuations, with the S&P 500 trading at 22.3 times forward earnings, the highest in two years, compared with a long-term average of 16.

Most big brokerages expect the benchmark index to end the year below the 6,000 mark, though Evercore ISI sees it closing at that level.

(Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Arun Koyyur)

((Lisapauline.mattackal@thomsonreuters.com))