The S&P 500 Index (SPX) hit a new all-time high last Friday, climbing above 7,270.
In recent weeks, the primary engine behind the index’s rally has been the earnings season. Most reports have come in well above expectations, while management teams and analysts have raised their outlooks for corporate profits and earnings per share (EPS), betting on double-digit growth throughout 2026—with the tech sector leading the charge. Despite ongoing geopolitical turbulence, these positive prospects point to steady demand for artificial intelligence (AI) technologies, cloud services, and digital transformation.
The macroeconomic landscape remains on solid footing. Preliminary data show that the US GDP for the first quarter (Q1) of 2026 rose by 2.0% year-over-year, standing out among previous periods. Accelerated economic growth is largely driven by significant business investment in AI software and related equipment, along with resilient consumer spending and positive export dynamics.
The labor market remains healthy, with an unemployment rate that is still low. While hiring has cooled slightly, the trend does not detract from the broader picture. Inflation inched up but stayed within a manageable range, giving the Federal Reserve the flexibility to avoid any hasty moves on interest rates.
The ultimate recommendation is to buy SPX at the current price, targeting 7,300 within a couple of weeks. To mitigate the risk of adverse market movements, place a Stop Loss order just below the resistance level, or around 7,190.
This content is for informational purposes only and is not intended to be investing advice.
