Can the S&P 500 Index Hit 3,000?
Founded in 1957, the S&P 500 (Standard & Poor’s 500 Index) is a stock market index that tracks the most popular stocks on the New York Stock Exchange. Representing more than 75% of U.S. market capitalisation, the S&P 500 is the index investors use to monitor the overall health of the U.S. economy. The S&P 500 is comprised of 500 US stocks, divided into 10 different sectors. Tech stocks currently dominate, with more than 23% of total market capitalization, followed closely by the Healthcare and Financial sectors, which account for about 13% each.
The S&P 500 index recently reached 2,475 points, its highest-ever level, and analysts anticipate that the index could soon reach 3,000 points, breaking through a hugely important psychological barrier that could spur the index to even greater heights.
The S&P 500 is made up of the largest and most profitable companies in the U.S., including Apple, Microsoft, Facebook, Alphabet Inc., JP Morgan Chase & Co, Amazon.com Inc., Johnson & Johnson, and Exxon Mobil Corp. Listed companies have different weightings according to their respective market caps, so any changes in the stock prices of the most influential companies have a greater impact on the index as a whole.
Investors’ outlook on the U.S. and global economies also plays a vital role in determining whether the value of an index will rise or fall. For the S&P 500 to hit 3,000 points, a large number of investors must come to a consensus and anticipate that the index could indeed go up.
A key factor might prove to be President Trump’s wide-ranging reform programme, intended to boost U.S. growth. Whilst the President faces entrenched opposition to many elements of his agenda, successfully implementing key tax cuts, achieving financial deregulation, and initiating major infrastructure projects could yet “make America great again”. However, on June 24th, the IMF (International Monetary Fund) revised down its U.S. growth forecast from 2.3% to 2.1% for 2017, sounding a pessimistic note concerning prospects for the world’s largest economy.
Traders who want to invest in the S&P 500 can do so by using worldwide online brokers. The UFX index trading platform, highly regarded for its elegance and reliability, as well as ease of use offers advanced charts and professional trading tools.
Always remember to keep an eye on economic calendars, as they can highly influence the stock market, especially central bank meetings and growth and inflation figures.