US stocks hit new record highs, driven by investor optimism about companies’ ability to keep growing profits despite rising interest rates and energy costs.
The S&P 500 posted its first record close since August, about a week before the start of third-quarter earnings season.
The performance reflects growing confidence that earnings will continue to support the market’s gains.
Artificial intelligence stocks led the rally, with Nvidia’s market value approaching $6 trillion.
AMD CEO Lisa Su also boosted optimism with her forecast that strong demand for chips would continue in the coming years.
Meanwhile, yields on 10-year US Treasury bonds fell after touching their highest levels since 2002, which supported growth stocks.
According to Bloomberg Intelligence data, estimates point to a roughly 25% rise in earnings for companies in the index during the third quarter compared with the same period last year.
Goldman Sachs strategists also expect the majority of companies to beat analysts’ estimates, citing strong economic data.
For their part, PIMCO analysts believe that AI investments and economies’ ability to absorb higher costs could support growth and curb inflation.
As a result, investors are watching earnings season closely as a test of whether the rally in US stocks can continue.
Confirmation of expectations could give the market additional momentum, while weaker-than-expected earnings or softer AI spending could prompt a reassessment of current market bets.
