S&P 500 Climbs Above 7,000 as Stocks Rally Broadens Beyond Tech

g3)7co5t6i7yob]e9)cnc08{_media_dl_1.png Bloomberg

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(Bloomberg) — The S&P 500 Index rose past 7,000 points for the first time, breaching a key psychological milestone, as investors bet on an acceleration of the US economy that will bolster profits for Corporate America.

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The benchmark for US equities rose 0.3% to a record 7,002.28 points on Wednesday. While tech shares provided the final push past the milestone on optimism over AI chip demand, gains in the past months have been concentrated in materials and energy sectors. The index jumped 16% in 2025 for a third straight year of double-digit gains, powered in large part by investments in companies developing artificial intelligence applications and hardware. 

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In recent weeks, investors have sought to diversify their equity positions to take advantage of expectations for a surge in economic growth. Materials and energy producers, along with makers of non-essential consumer items have led stocks higher in the early days of this year, continuing a trend that began in November.

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Back then, the index peaked in late October before jitters about AI spending forced a rethink in the monolithic AI trade. Winners like Oracle Corp. and CoreWeave Inc. tumbled along with some of the Magnificent Seven companies. The S&P 500 fell as much as 5.1% from its October high before an end-of-year advance pushed it back to a record. It had been churning near 6,900 for much of the past few weeks.

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“The market’s been kind of stuck at 6,900 plus or minus 50 points since October,” said Keith Lerner, chief investment officer and chief market strategist at Truist Advisory Services. “Break above the upside of a more than two-month sideways move” provides investors a sentiment boost and nice technical move, he said.

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“It’s not a game changer but it’ll bring a little more excitement,” Lerner said of the milestone. “It reinforces that the bull-market trend is still in tact.”

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The break above the 7,000 mark comes even as investors have begun to rotate into cheaper sectors of the market. Consumer staples and energy have rallied through the final months of 2025. The Federal Reserve interest-rate cuts have also helped spur gains.

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While the gains have come somewhat at the expense of companies chasing AI riches, the likes of Nvidia Corp., Microsoft Corp. and Alphabet Inc. are hardly slouches. Their capital outlays have hit the 100s of billions level while tangible profits remain scant, though, prompting diversification that has lifted the broader market. 

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Investors expect that consumer-driven areas of the market will begin to out perform as the economy picks up. The bet is that Trump’s tax and spending bill, passed last year, and clarity on the tariff regime will allow businesses to invest better and drive profits higher. 

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While the new high is seen as a psychological milestone, some argue it’s not an influential or technical level.

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“Just like the odometer of a car hitting 100,000 miles, the market hitting 7,000 can be notable,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. He said the marker would likely further divide bulls and bears, with one side arguing the milestone was hit on strong earnings momentum and the other arguing US stocks are even more expensive now.

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“It will be a ‘show me the money’ kind of year where investors want tangible proof that companies aren’t throwing good money after bad,” Jacobsen said.

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—With assistance from Matt Turner.

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