S&P 500 tops 7,000 for first time

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The S&P 500 climbed above 7,000 points for the first time on Wednesday, as stocks rebounded from the sell-off sparked by last week’s Greenland crisis and investors turned their attention back to corporate earnings.

The Wall Street benchmark, which has posted double-digit returns in each of the past three years, rose 0.3 per cent to 7,002 points in early trading.

The milestone comes as stocks recoup the sharp losses triggered by Donald Trump’s tariff threats over Greenland — when the blue-chip index tumbled 2.1 per cent in one session — and despite broader market volatility triggered by a currency and bond sell-off in Japan.

Investors’ attention has turned back to what analysts expect to be a strong earnings season, with Big Tech companies Microsoft, Meta and Tesla set to report earnings later on Wednesday, followed by Apple on Thursday.

Tech shares gained after ASML, the Dutch maker of chip manufacturing equipment, earlier on Wednesday forecast bumper sales this year on the back of the AI boom.

Nvidia rose 1.5 per cent in early trading, while Tesla was up 1.2 per cent ahead of its results.

Analysts at Deutsche Bank are predicting one of the strongest quarters for earnings since the 2008 financial crisis, bar the post-pandemic recovery, in terms of year-on-year growth.

Earnings season was “likely to put a floor under tariff noise”, said Matthias Scheiber, head of the multi-asset team at Allspring Global Investments.

Wall Street analysts are almost unanimously forecasting a fourth consecutive positive year for the S&P, which passed the 6,000 mark in late 2024 and whose gains in recent years have largely been driven by the booming tech sector.

Those predictions have come despite Trump’s erratic policymaking and fears in some quarters that Silicon Valley’s vast AI investments may fail to pay off.

“The S&P 500 just hit 7000 for the FIRST TIME EVER. AMERICA IS BACK!!!” the US president wrote on his Truth Social platform on Wednesday.

Strategists also expect US interest rates to fall, no matter who replaces Jay Powell as chair of the Federal Reserve in May, providing stocks with a tailwind. The Fed is expected to leave rates unchanged at its meeting later on Wednesday.

The Trump administration is rolling back capital requirements imposed on big banks in the aftermath of the financial crisis, which is also expected by analysts to fan economic growth.

Goldman Sachs has tipped the S&P 500 to end the year at 7,600, implying a roughly 8.5 per cent gain, slightly above the average forecast of the other major banks.

“Healthy economic and revenue growth, continued profit strength among the largest US stocks and an emerging productivity boost from AI adoption” would extend the bull market’s run this year, said Ben Snider, Goldman’s chief US equity strategist.