Stocks wrapped up a monster first quarter on a subdued note Thursday, with both the S&P 500 and Nasdaq posting double-digit gains the first three months of 2024 – powered by investors’ optimism about the state of the economy.

The S&P 500 gained 10.8% in the first quarter, continuing a rally that began in late 2023 and notching its strongest start to the year since 2019. The tech-heavy Nasdaq gained 10.9%.

The Dow Jones Industrial Average also notched a respectable first quarter with a gain of 5.5%, which analysts took as a welcome sign that the current rally isn’t wholly dependent on Big Tech.

The market surge is driven by the continued strength of the economy, with consumers continuing to open up their wallets, analysts said.

“Underscored by a solid economic landscape and strong labor market coupled with resilient consumer spending, the Dow has powered ahead to post new highs,” said Quincy Krosby, chief global strategist at LPL Financial.

The Dow closed at 39,807 Thursday, up 0.1% for the day and setting a record. The S&P 500 closed at 5,254, up 0.1% for the day, while the tech-heavy Nasdaq fell 0.1% to close at 16,379.

The strong quarter for all three indexes extends gains in the final months of 2023, when a cadre of Big Tech stocks dubbed the Magnificent Seven pulled the market higher. Companies that benefited from the hype around advancements in artificial intelligence wowed Wall Street the most, specifically Microsoft and Nvidia.

But the market’s performance so far in 2024 has also broadened the rally. The Dow, which includes 30 large companies traded on U.S. stock exchanges ― so-called blue-chip companies, including Apple, Boeing, Nike and Walmart – is a closely watched bellwether of how the stock market is doing.

Because it excludes several of the Magnificent Seven, some analysts consider it to be more representative of the U.S. economy itself ― “Main Street America’s favored index,” as Krosby puts it.

The Dow’s strength suggests the current rally in stocks might have staying power, analysts said.

The success of the Dow “indicates prosperity in this country, and an expanding economy,” said Michael Farr of the Washington, D.C.-based investment firm Farr, Miller and Washington.

One factor behind the Dow’s strong performance was a rally among companies linked to the financial sector, which accounted for almost half of its increase for the quarter, Farr said. American Express and insurance company Travelers have each gained about 20% since the start of the year; Goldman Sachs climbed more than 7%; and JPMorgan finished the quarter up by about 16%.

The rally in the financial sector is supported in large part by the fact that consumer spending has held up better than expected, said Wayne Wicker of MissionSquare Retirement.

“The resilience of the economy is an upside surprise for investors this year. … The economy remains vibrant, and consumer spending continues to drive forward,” Wicker said.

Looking ahead, investors will be closely watching the path of interest rates as well. The Federal Reserve is keeping rates at their current high until they see more evidence of inflation coming down. But the central bank is expected to pursue three rate cuts in 2024.

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