S&P 500 crosses 7,000 milestone as tech giants rally ahead of Fed decision
Index opens at record 7,001.05, driven by earnings optimism and expectations for unchanged interest rates
The S&P 500 breached the 7,000 threshold for the first time on Wednesday morning, opening at 7,001.05 and advancing 0.3% as investors bet on robust corporate profits and a steady Federal Reserve policy. The milestone marks the latest peak in a historic rally that has been propelled by the largest technology companies.
The index's ascent to 7,000 comes as investors anticipate no interest rate adjustments from the Federal Reserve, with markets focused on the central bank's assessment of economic growth and future policy trajectory. The Fed is expected to keep rates unchanged, providing support for the risk-on sentiment that has driven equities higher in early 2026.
Technology stocks have been the primary engine of the rally. The "Magnificent Seven"—Apple, Amazon, Microsoft, Meta Platforms, Alphabet, Tesla, and Nvidia—accounted for 53% of the S&P 500's return in 2025, according to Goldman Sachs strategists. The information technology and communication services sectors together contributed 63.1% of the index's total return last year.
Three of those tech giants are set to report quarterly earnings after market close today, adding to the pre-announcement optimism. Tesla, Microsoft, and Meta Platforms are scheduled to release results for the quarter ending December 31, with analysts projecting particularly strong performance from Microsoft. Consensus estimates call for revenue of approximately $80.3 billion, representing a 15% year-over-year increase, and earnings per share of $3.87 to $3.91, up 21% from the prior year.
Meta Platforms, which reported earnings of $7.25 per share on revenue of $51.24 billion in its most recent quarter, is also drawing investor attention to its continued investment in artificial intelligence. Tesla, meanwhile, is expected to report earnings per share of $0.45 for the quarter, with analysts watching for updates on CEO Elon Musk's autonomous driving ambitions.
The broader rally reflects investor confidence in an accelerating U.S. economy, which is expected to boost corporate profits in the coming quarters. Goldman Sachs strategists project the S&P 500 to achieve a 12% total return in 2026, driven by earnings growth amid solid economic fundamentals and continued monetary easing.
The concentration of market capitalization among a handful of technology companies has reached record levels, raising concerns among some analysts about market breadth. However, the S&P 500's advance beyond 7,000 demonstrates that the AI investment cycle and tech dominance continue to provide significant momentum for the broader market.