The S&P 500 breached the 7,000-point mark for the first time today, driven by unrelenting optimism over artificial intelligence and expectations of strong Big Tech earnings as well as monetary policy easing.
The benchmark index’s ascent between successive 1,000-point additions has quickened in recent years, reflecting mounting investor confidence in the US economy and corporate America.
It took about three years for the S&P 500 to rise to 5,000 points from 4,000, but only about nine months to jump from 5,000 to 6,000, which it reached in November 2024.
AI-linked optimism has been one of the key drivers of US markets, pushing tech giants including Nvidia, Microsoft and Alphabet higher. Technology stocks account for nearly 50% of the S&P 500.
Expectations of interest rate cuts by the US Federal Reserve have also buoyed risk appetite, with traders betting on two 25-basis point reductions in 2026 after the central bank lowered interest rates three times last year.
The Fed is, however, widely expected to hold interest rates at its meeting today.
Markets have rebounded to record highs following bouts of selloff earlier this month on worries related to the US–NATO friction over Greenland, tariff uncertainty and doubts over the Fed’s independence.
Analysts expect profit for S&P 500 companies to increase 15.5% in 2026, an improvement from a 13.2% growth forecast for 2025, according to data compiled by LSEG.
Tech earnings, powered by AI boom, are largely expected to drive US corporate growth in the fourth quarter, with the sector’s profit projected to rise about 27%, compared with an estimate of a 9.2% increase overall for S&P 500 companies, LSEG data showed.
Revenue growth from the tech sector in the quarter was pegged at about 18%, versus the estimate of a 7.3% rise for S&P500, the data showed.
The S&P 500 has rebounded nearly 45% from its lows in April 2025, when US President Donald Trump’s tariffs had roiled global markets.
