The S&P 500 has hit yet another milestone this year, ending above 5,000 for the first time on Friday.

It’s good news for Americans’ 401(k)s, which are heavily invested in stocks, and comes just three weeks after the index notched its first record close since January of 2022.

Tom Hainlin, national investment strategist at U.S. Bank Wealth Management, called the record a "symbolic milestone."

"It's a big, round number," he told USA TODAY. "It's a record high. But I think for the average person with a 401(k), it still suggests that the economy seems to be doing well."

Why is the S&P 500 up?

The S&P 500 closed Friday at 5,026.61, up 0.57%.

The market’s performance has been bolstered by signs that the Federal Reserve has ended its rate hikes and may cut rates this year. Excitement around artificial intelligence advancements has also pushed up companies’ stock prices.

“We've gone through a pandemic ... We're in two wars. And yet, there just tends to be a gravitational pull upward over the longer-term" for stocks, said Kristina Hooper, chief global market strategist at investment management company Invesco, who also noted that surging interest rates have been a challenge over that time.

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Why should I care about the S&P 500?

So is this a big deal for Americans holding investments in a 401(k) retirement plan?

Yes and no.

The S&P 500, an index that includes 500 leading publicly traded companies, is regarded as one of the best gauges of Wall Street's health. When the benchmark index goes up, Americans' 401(k)s tend to go up as well.

“It's a broad group of very important stocks,” said Stephen Suttmeier, Bank of America’s chief equity technical strategist.

But while the 5,000 milestone is making headlines, experts say it may not sustain that level for long.

The first few months of an election year are “pretty choppy” for markets, according to Suttmeier. Similar milestones in the past have been followed by dips, which means it may take some time before the index finds its footing above the 5,000 mark.

“My guess is we should be able to pass 5,000 meaningfully. But I don't think we surpass 5,000 meaningfully within the next three, four months,” Suttmeier said, adding that he doesn't find Friday's milestone to be "all that significant."

But even if the index does fall, Hooper said the milestone is a sign of the market’s resiliency, noting that the S&P 500 has already doubled since surpassing 2,500 in September of 2017.

“I think more than anything else, this is a symbolic event that reminds investors of the importance of staying invested,” she said.