(Bloomberg) -- The S&P 500 Index finished above 5,000 for the first time ever Friday as investors continue to bet on the resilient US economy and the Federal Reserve’s plans to start cutting interest rates later this year. 

The equities benchmark closed at 5,026.61 to notch five straight weeks of gains. It briefly breached the round-number threshold minutes before the close Thursday.

It took 719 sessions for the index to set its latest 1,000-point milestone, a gain of 25%. The 50% advance from 2,000 to 3,000 needed 1,227 trading days, from 2014 to 2019, according to data compiled by Bloomberg. To double from 1,000 in 1998, it needed 4,168 sessions to get to 2,000 in 2014. 

“The big driver for the rally is the realization that the US economy is unlikely to falter in the way that the average prognosticator had expected,” Yung-Yu Ma, chief investment officer at BMO Wealth Management, said over the phone. “A better economy, healthy profits and lower inflation is providing the fuel.”

The stock market has been on an amazing run since November, with the S&P 500 rising in 14 of the last 15 weeks — something it hasn’t done since 1972. Most of that is from the so-called Magnificent Seven technology companies — Alphabet Inc., Amazon.com Inc., Apple Inc., Meta Platforms Inc., Microsoft Corp., Nvidia Corp. and Tesla Inc.

Meta, for instance, has rallied more than 400% since November 2022 thanks to a cost-cutting fueled profit boom and artificial intelligence fever. The lone weight has been Tesla, which is down 15% over that same timeframe. In January alone, it erased nearly $200 billion of market value after warning its rate of expansion will be “notably lower” this year.

Despite the 5,000-point milestone, there’s caution that the S&P 500’s 20% rally since early November may hit a roadblock soon. The Fed kept its main interest rate at a 22-year high for a fourth straight meeting last week, and while officials signaled their openness to cutting them eventually, it won’t happen right away.

That said, Big Tech is still poised to fuel a fresh wave of earnings growth, according to Mary Ann Bartels, chief investment strategist at Sanctuary Wealth. 

The Magnificent Seven are projected to post combined profit growth of about 55% in the fourth quarter, dwarfing the S&P 500’s expected expansion of 1.2%, according to data compiled by Bloomberg Intelligence. Earnings for the seven biggest growth companies in the S&P 500 are on course to rise by more than 20% in 2024, double the combined gain of S&P 500 companies, according to data compiled by Bloomberg Intelligence.

This helps explain why the S&P 500’s tech sector is trading at a 33% premium to the index on a forward price-to-earnings basis, per data compiled by Bloomberg Intelligence.

“This is the year of the bucking bull,” said Bartels, who is upping the firm’s exposure to Big Tech. “Markets may get choppy, but we still see strength continuing into year-end even with rich growth valuations. Leadership remains in tech since AI will contribute to productivity and earnings growth for companies.”

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