AI investment sustains US stock rally despite high rates, inflation pressure
SPY•GKB said AI investment and strong corporate balance sheets are helping US equities hold near record highs despite high rates, rising oil prices and inflation. S&P 500 earnings growth is expected near 30%, including about 65% for big technology stocks and more than 100% for energy companies.
1. Earnings and AI support
GKB said large technology stocks have driven gains in the Nasdaq Composite and S&P 500, with AI investment a key support. Expectations for S&P 500 earnings growth are near 30%, while big technology earnings are forecast to grow around 65% year over year.
2. Energy and elections
Energy sector earnings growth is projected above 100%, benefiting from higher oil and diesel prices. GKB cited the November 3 US midterm elections as a swing factor, saying markets typically favor divided government that limits policy intervention.
