Last week, the S&P 500 Index (SPX) hit a new all-time peak of 7,845 and closed near record highs on Friday.
Despite elevated interest rates and persistent tensions in the debt market, US stocks continue to maintain their upward momentum, kept afloat by expectations of robust corporate results. This week marks the beginning of the third-quarter (Q3) reporting season. According to analysts’ consensus forecast, aggregate earnings of S&P 500 companies could rise 29.5% year-over-year, with revenue increasing by 12.3%. Such bold projections pave the way for further capital inflows into the US stock market.
But why do analysts have so much confidence in S&P 500 reports? It is all about the tech sector—the index’s star. Major firms are currently ramping up investments in artificial intelligence (AI) infrastructure, bolstering demand for semiconductors, equipment, and cloud services. Strong financial results from the S&P 500’s largest constituents can offset weakness in specific segments and support continued growth.
The American debt market remains a key headwind. 10-year Treasury yields are still impressive at 5.24%, making bonds a more attractive alternative to equities.
From a technical perspective, the index maintains an uptrend, setting the stage for further gains. Breaching the all-time high near 7,845 could be the next objective. A decisive breakout and consolidation above this level would likely boost bullish momentum and pave the way toward the 8,000 target.
The overall recommendation is to buy SPX at the current price of 7,835, aiming for 8,000 within a couple of weeks. To mitigate the risk of adverse market movements, place a Stop Loss order at 7,730.
This content is for informational purposes only and is not intended to be investing advice.
