A record-breaking run of earnings upgrades is fueling US stock market optimism, keeping the S&P 500 within 1% of its all-time high despite broader macroeconomic headwinds.
Article notes WTI prices above $90 but does not discuss further impact.
The S&P 500 is supported by a 21-week streak of earnings estimate upgrades, the longest since 2021, which signals robust corporate health despite macroeconomic headwinds. Analysts from UBS and State Street Global Markets highlight that this earnings strength is driving investor appetite, allowing the index to remain near record highs even as WTI oil prices exceed $90 and interest rate concerns persist.
The rise in yields is currently accompanied by stronger economic growth, which allows stocks to digest higher borrowing costs more effectively than in previous cycles.
According to State Street Global Markets, micro-level earnings performance is currently driving stock market behavior more than macro-level economic indicators.
US equities remain resilient as analysts raise earnings estimates for the 21st consecutive week, marking the longest streak since 2021. Despite mounting inflation risks and WTI crude prices holding above $90, strong corporate fundamentals continue to drive investor appetite and offset concerns over potential Federal Reserve rate hikes.
Stocks are being supported by strong corporate earnings growth and upgrades, which analysts believe are currently outweighing macroeconomic pressures like higher borrowing costs.