Standard and Poor’s 500 Index, aka the S&P 500, is one of the most influential stock market indices reflecting the value of the 500 largest companies in the United States. Investors use this index to assess the state of the stock market and make informed decisions about buying or selling shares.
Established in 1957,the S&P 500 index encompasses stocks of companies with significant capitalization, leading in their respective industries. The index is calculated based on the companies financial indicators, such as profit, dividends, market capitalization, etc. A rise in the index indicates a favorable condition of the US stock market, allowing investors to anticipate an increase in stock prices. Conversely, a decline in the index may indicate economic challenges.
In October 2022, the S&P 500 index experienced a decline amid investor concerns about a potential recession in the US economy. These concerns were related to various factors, including the Fed’s decision to raise interest rates, increasing inflation, and uncertainty in the labor market. However, a month later, the S&P 500 index reached its historical maximum, exceeding the 4,500-point mark. This increase was attributed to rising oil and commodity prices.
Most recently, on June 15, 2023, the index reached 4,425 points, followed by a downturn.
Although the Federal Reserve kept the rate unchanged at 5-5.25%, the regulator made it clear that the rate may continue to grow in the future, and any reduction is not expected until at least 2024. Forecasts suggest that the S&P 500 index offers a similar profitability over a 12-month horizon.
Since January, the expected annual return of the index has increased by 15%,making the first half of 2023 one of the strongest in the past two decades. Nevertheless, the precise yield on high-risk stocks and safer bonds may indicate the end of the bullish phase in the stock market.
To gain a comprehensive understanding of market sentiment, let’s examine the top 5 stocks in the S&P 500 index.
NASDAQ:AAPL (3.027T USD): Apple Inc. is experiencing active development, with the value of its shares on the rise and no apparent factors that could impede its growth.
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