S&P 500 Jumps 15% in Q2, Posting Best Quarter Since 2020 on AI Boom
Updated
Updated · The Motley Fool · Jul 7
S&P 500 Jumps 15% in Q2, Posting Best Quarter Since 2020 on AI Boom
3 articles · Updated · The Motley Fool · Jul 7
Summary
Nearly 15% gains in the second quarter gave the S&P 500 its strongest quarter since the 2020 COVID rebound, lifting its first-half advance to about 10%.
AI-driven revenue and earnings growth underpinned the rally, with FactSet estimates pointing to 24% earnings growth in 2026 and 17% in 2027.
Valuations remain a key watchpoint: the Shiller CAPE is near a record high, but the S&P 500's forward P/E is around 23—above its long-term average yet below 2024 and 2025 peaks.
Risks still include high inflation, slowing growth, possible Federal Reserve rate hikes and geopolitical tensions, even as the index heads toward a fourth straight year of double-digit gains.
History shows such streaks are rare—the last five-year run of double-digit returns ended in the late-1990s tech bubble—though the report argues long-term investors are usually rewarded for staying invested.