S&P 500 Gains 7.7% in 2026 as $725 Billion AI Capex Outruns 4.2% Inflation Fears
Updated
Updated · Forbes · Jun 14
S&P 500 Gains 7.7% in 2026 as $725 Billion AI Capex Outruns 4.2% Inflation Fears
2 articles · Updated · Forbes · Jun 14
Summary
By June 9, the S&P 500 was up 7.7% for 2026, with AI-driven tech gains outweighing worries about higher oil, tariffs and a possible rise in interest rates.
Google, Amazon, Microsoft and Meta alone plan $725 billion in 2026 capital spending—up 77% from $410 billion last year—while AI-infrastructure names are driving roughly half of S&P 500 EPS growth.
That optimism is colliding with richer valuations: the Shiller CAPE hit 41.6 in May, the second-highest level in more than 140 years, leaving the market vulnerable if AI earnings or major IPOs disappoint.
Oil remains the main macro threat after the Iran war pushed Brent as high as $114 a barrel and left crude still up 37% for 2026 by June 10, helping lift May inflation to 4.2%, a three-year high.
Wall Street still expects about 5% more upside by year-end, but higher rates could pressure the roughly $1.5 trillion in AI capex expected to be financed with new debt.