The S&P 500 extended its remarkable winning streak, reaching an all-time high for the fifth consecutive session, fueled by robust U.S. economic growth data for the fourth quarter.

Meanwhile, electric vehicle giant Tesla faced a significant setback as it tumbled in response to a disappointing sales forecast.

This recent surge in the S&P 500 marks the first time in two years that it has achieved record highs, driven by optimism about the economy, lower interest rates, and growing investments in artificial intelligence.

Tesla experienced a sharp decline of 12%, hitting its lowest point since May 2023.

Impacted margins

CEO Elon Musk’s warning of slower sales growth in the coming year, despite price reductions that have negatively impacted margins, contributed to this decline.

As a result, Tesla’s market value dropped to approximately $580 billion, falling below Eli Lilly (LLY.N) and just above Broadcom (AVGO.O).

Contrary to predictions of a recession following the Federal Reserve’s aggressive interest rate hikes, the U.S. economy exhibited faster-than-expected growth in the December quarter, with a full-year growth rate of 2.5%.

Strong consumer spending played a pivotal role in this economic resilience.

Jobless claims

Additional data revealed that initial jobless claims for the week ending January 20 rose to 214,000, exceeding the estimated figure of 200,000.

Investors are eagerly anticipating quarterly results from tech giants such as Apple (AAPL.O), Microsoft (MSFT.O), Amazon (AMZN.O), Alphabet (GOOGL.O), and Meta Platforms (META.O) in the coming week, which will provide insights into whether their high valuations are justified after significant stock surges since 2022.

EV losses

Following Tesla’s quarterly report, other electric car manufacturers also experienced losses. Rivian Automotive (RIVN.O) dropped 2.2%, and Lucid Group (LCID.O) fell by 6.7%.

American Airlines (AAL.O) reported a 10.3% increase as it predicted upbeat annual profits.

Highest consumer financial stress level in three years

Boeing (BA.N) faced a 5.7% decline after the U.S. Federal Aviation Administration prohibited the troubled planemaker from expanding the production of its 737 MAX narrowbody planes.

Advancing stocks outnumbered declining ones within the S&P 500 (.AD.SPX) with a ratio of 4.0 to one. The S&P 500 marked 50 new highs and two new lows, while the Nasdaq recorded 97 new highs and 119 new lows.