S&P 500 Hits 7,517 Record High as Earnings Growth Outpaces Valuation Expansion

5 articles · Updated · TKer by Sam Ro · May 17

The S&P 500 set an intraday record of 7,517.12 and a closing high of 7,501.24 on Thursday, capping a rally that left the index up 8.2% year to date.
Better-than-expected earnings and rising forward estimates drove the move, with Morgan Stanley's Mike Wilson arguing earnings growth has been rising faster than stock prices.
That dynamic left stocks more expensive in price but cheaper in valuation: after a 9% peak-to-trough drop earlier this year, the market's forward P/E fell 18% and remains below prior highs.
Investors have already absorbed risks including an Iran-driven oil spike, AI disruption and private-credit concerns, while hard economic data still points to steady demand and positive Q2 growth.
The broader takeaway is that equities are pricing a future recovery rather than current headlines, making long waits for lower valuations risky if earnings keep climbing.

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