S&P500 has been on a roll, but will it continue?

Over the past few months, the S&P 500 index has been growing in value in an almost linear fashion, taking the prestigious North American index, which tracks the performance of the largest companies whose stock is listed on exchanges in the United States, from a low point in October to its extremely high position of today.

On October 27 last year, the S&P 500 index languished at 4,117.9 points according to FXOpen charts, representing a dip in value accumulating as summer gave way to autumn last year.

Immediately after this took place, a rally began, which lasted until now, taking the S&P 500 index from that low point at the end of October to 5,027.8 at the close of the US trading session yesterday.

That is a remarkable figure indeed and is a high point that occurred following the market euphoria that took place at the end of last week when the S&P 500 index passed the 5,000-point mark, making it a record high for the prestigious index.

Overall, the S&P 500 has been growing in value tremendously when looked at over a longer period of time. According to some sources in mainstream media, the S&P 500 index increased by a remarkable 24% during 2023, despite its dip during the beginning of the first quarter.

The buoyancy of the S&P 500 index is interesting, especially when considering that it has been growing in value with such verve and vigour for a period of a few months. There is no particular revolutionary economic activity which could have caused such investor confidence, just steady data surrounding the earnings reports of some of the contingents of the index, as well as positive views from Fed policymakers on the overall health of the US economy.

Indeed, despite the much-expected interest rate cuts have not come to fruition, investors appear to remain continually optimistic about the value of stocks of listed companies in the United States, which is of particular interest considering that during the speculatory period, it would have been a pragmatic view that most companies would have extra available capital to reinvest in growth or to have more capital reserves on their balance sheets rather than having to use that capital to service monthly borrowing commitments due to higher interest rates that currently exist.

Looking at the value of the S&P 500 in the advent of today's US trading session makes for an interesting observation. The value, according to FXOpen charts, is 5,006 at the bottom end of the candlestick, demonstrating a minor tailing off since yesterday's high point.

It is still over 5,000 points, however the market, which has been growing steadily, is now at a very high position, with a slight reduction having taken place after yesterday's high points.

There is absolutely no negative data on the horizon, so it could just be a natural adjustment to a possible overvaluation, or it could be a minor blip before a continued increase.

Given the very normal circumstances that surround the overall US economy, only tracking this performance will tell.