S&P 500 closes above 5,000 for first time as US inflation cools

US stock markets hit another historic high on Friday, with the S&P 500 closing above 5,000 for the first time.

The broad-based index of the largest and best-known listed companies has been driven higher by a series of reports underlining the US’s resilient economy and retreating inflation.

On Friday the share index finished at 5,026.61: up 0.6% on the day, and 22% since a rally took hold in late October.

Related: S&P 500 hits new record high amid signs of easing US economic gloom

Consumer price growth was even lower than previously estimated in December, according to revised inflation data released on Friday. The US consumer price index rose 0.2% in December, rather than the previously reported 0.3%, the labor department’s Bureau of Labor Statistics said.

With the rate of price rises now easing towards pre-pandemic levels, investors are preparing for the Federal Reserve to start cutting interest rates for the first time in four years. Stocks have also been lifted by a robust earnings season, particularly among the US’s largest listed companies, and by a blockbuster jobs report last week.

Breaching 5,000 is unlikely to slow the S&P 500’s rise, according to market analysts, who note that it only cleared 4,000 for the first time less than three years ago.

“There are times at which those round numbers matter a whole lot, but in this case, I don’t think so,” Katie Stockton, managing partner of Fairlead Strategies, a research firm, told CNBC. “We still have such strong momentum behind the market.”

The S&P 500 has had an extraordinary run since Joe Biden first won office in November 2020, when it stood at 3,369.16. It has since surged about 49% as pandemic restrictions were loosened, much of the world grappled with inflation, and two major conflicts broke out.

While Donald Trump was in the White House he frequently touted the stock market as a measure of his administration’s economic success. As the pair prepare to face off in November, the former president has claimed – without evidence – that his electoral prospects are responsible for the recent rally.

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The market has risen because investors “think I’m going to be elected”, the former president told Fox News this month. The Biden campaign has highlighted the market rallies and the continued strength of the jobs market.

“Good one Donald,” Biden wrote last month under an X post noting that Trump had claimed the stock markets would crash under the US president.