S&P 500 Hits 11 May Records as Wall Street Bulls Back AI-Driven Rally
Updated
Updated · Financial Times · May 31
S&P 500 Hits 11 May Records as Wall Street Bulls Back AI-Driven Rally
5 articles · Updated · Financial Times · May 31
The S&P 500 closed at record highs 11 times in May and is up about 11% in 2026, while the Nasdaq has gained 16%, as investors keep buying despite warnings of an AI-fueled bubble.
First-quarter earnings beat Wall Street forecasts, prompting Goldman Sachs and Morgan Stanley to lift year-end S&P 500 targets and reinforcing bets that AI spending on chips and data centers will keep profits growing.
AI-linked shares have led the surge: the Philadelphia Semiconductor index has jumped 81% this year, Sandisk is up 600%, and several hardware names including Micron, Dell and Intel have risen about 200%.
Valuations have stretched, with the S&P 500 trading at roughly 21 times forward earnings versus a 30-year average of 17, and investors such as Michael Burry and Paul Tudor Jones comparing the mood to late-1999 dotcom excess.
Many strategists still argue the rally is supported by durable earnings growth, no Fed tightening and a pipeline of major AI IPOs that will test whether demand for the sector can absorb even more supply.
With record-high bond yields, is Wall Street's S&P 500 forecast ignoring clear economic warning signs?
Will the AI earnings boom collapse under the weight of America's strained power grid and supply chains?