The most widely-used measure of the U.S. stock market closed above 5,000 for the first time Friday, a round psychological figure investors have targeted amid a crush of fourth-quarter earnings.

Why it matters: The new record closing high around 5,026 comes as Q4's mixed— but still encouraging — reporting season comes to a close. It's simply the latest step higher in the bull market's steady push into unseen territory, due in part to market hopes for (eventually) lower interest rates.

State of play: This new bull market was born at the moment the bear market — brought on by the Federal Reserve's rate hikes over the last couple years — expired on Oct. 12, 2022.

• Since then, the S&P 500 is up more than 40%. It's up more than 5% so far in 2024.

Context: We know that humans tend to fixate on the first item of information they receive when assessing prices, a phenomenon behavioral economists call "anchoring."

• A corollary to anchoring is known as "left digit bias," in which people respond disproportionately to the first number in a price, which is why things are priced at $19.99, rather than $20.

Bottom line: In other words, big round numbers matter, because people pay attention to them.

• The S&P at 5,000 is likely to generate a wave of stories — like this one! — that resonate with the public, and communicate that the market is doing pretty darn well.
• That could attract new money to the party. Or maybe not, we'll have to wait and see.

Go deeper: The S&P's top stocks haven't been this concentrated in 50 years