S&P 500 Gains 9.2% YTD as 14.4% Earnings Growth Drives P/E Down 4.6%

1 articles · Updated · yardeniquicktakes.com · May 24

Forward earnings for the S&P 500 have climbed 14.4% this year through Friday, while the index itself is up 9.2%, indicating the rally has been led by profit expectations rather than richer valuations.
The forward price-to-earnings ratio has fallen 4.6% to 21.1, undercutting the view that the market's advance is mainly an AI-fueled bubble driven by investor hype.
Since bottoming on March 30, the S&P 500 has surged 17.8% and hit a record high on May 14; the Dow Jones Industrial Average also reached a record on Friday.
The report argues the market is being powered by 'fabulous earnings momentum' rather than 'fear of missing out,' with recession risk seen as the main threat to current valuations.

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