U.S. stocks rallied strongly in the last trading session of the week following the revision of December’s US inflation estimate, which was lower than initially reported. The S&P 500 index ended above the crucial 5,000 barrier as positive economic and positive earnings in the world’s largest economy continued to flow in.

The S&P continued its march beyond 5,000 on Friday as megacap technology firms saw further gains. Nvidia had a 3.6% increase, while Alphabet added over 2%. Strong earnings caused Cloudflare to soar to a 19.5% increase, which in turn stimulated the entire cloud industry. Additionally, semiconductor stocks increased; the VanEck Semiconductor ETF had a 2.2% increase.

Undoubtedly, a closing above this widely monitored mark will make headlines and exacerbate feelings of fear of missing out. Round numbers like 5,000 might provide the market with a psychological zone of support or resistance in addition to possibly boosting sentiment.

Sentiment was also improved by an adjustment downward in the consumer price index for December. The administration changed the number from the 0.3% rise that was first published to a 0.2% increase. With food and energy excluded, core inflation figures remained unchanged. Next week will see the release of the CPI data for January.

The Nasdaq gained 2.3% and the S&P rose 1.4% for the week. The Dow ended the day unchanged. The five consecutive winning weeks and the fourteenth positive week in a row were achieved by all three main averages.

Currently accounting for almost 30% of the S&P 500 index are the technology stocks collectively referred to as the “Magnificent Seven,” which include Apple, Microsoft, Alphabet, Amazon, NVIDIA, Meta, and Tesla.

More than three-quarters of the S&P 500’s overall return for the previous year came from them. Contrary to what many observers had projected, the market rally in 2024 has become even more concentrated as market leadership has grown.

The strong earnings season, declining inflation figures, and a robust economy have propelled the market’s surge in 2024. Additionally, it helped the S&P close above the 5,000 mark, which it had previously touched on Thursday’s session. In April 2021, the index crossed 4,000 for the first time.