During the first four months of 2023, the S&P 500 added an impressive $2.2 trillion in market value. This equates to a gain of about 9.2%, slightly more than half of the 18% it lost in all of 2022. Leading economists have been forecasting an impending recession since the Federal Reserve started raising rates last year. Considering the consensus, why is the stock market pushing higher?
Market capitalization
The S&P 500 is an index that tracks the 500 largest U.S. publicly traded companies. However, the index is not evenly distributed across all companies. Instead, it is weighted by market capitalization. Market capitalization is calculated by multiplying the number of shares outstanding by the current share price. The larger the market capitalization, the larger the influence the company has on the performance of the index.
You can read the full article by Senior Portfolio Manager, Director of ESG Strategies Andy Drennen in the Kansas City Star. Shared with permission from the Kansas City Star.
Click here for more information about Simmons Bank Private Wealth Management Services.
The views and opinions expressed in this article are those of Andy Drennen and are not endorsed by, and do not necessarily reflect the views of, Simmons Bank. Simmons Bank does not provide tax, accounting, or legal advice.