S&P 500 ETF Up 9.2% YTD on AI Rally, Inflation Risks Rise
SPY•The S&P 500 ETF has gained 9.2% year-to-date and notched eight straight weekly wins, reaching record highs across major indexes. Rising grocery prices – up 3.2% in April and forecast to climb to 4.5% this year – and potential Fed rate hikes pose downside risks identified by Goldman Sachs.
1. ETF Performance
The S&P 500 ETF has surged 9.2% year-to-date, marking its eighth consecutive weekly gain and pushing major equity benchmarks to fresh all-time highs.
2. AI-Driven Rally
Investor enthusiasm for artificial intelligence has fueled the advance, with memory chip and tech giants such as Nvidia, Micron, Sandisk and Alphabet leading sector gains.
3. Inflation Headwinds
US grocery prices rose 3.2% in April and are projected to increase up to 4.5% this year, threatening to curb consumer spending and weigh on corporate revenues.
4. Bubble and Rate Risks
Goldman Sachs strategists warn that excess speculative risk, potential Fed rate hikes and higher energy costs from a Strait of Hormuz closure could trigger a market pullback.
