Wall Street ends higher as investors turn to earnings season

Reports from big U.S. banks will kick off the second-quarter earnings season next week. Analysts are expecting S&P 500 earnings to surge 24% from a year earlier, with technology companies driving much of the growth, according to LSEG I/B/E/S.

"This is a high-bar quarter with a narrow margin of error," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota. "The banks will give us a good read on the underlying economic strength and what consumers and businesses are doing."

Thanks to increased corporate profit estimates, the S&P 500 is trading at about 20 times expected earnings, down from an earnings multiple of 21 in late May, even though the benchmark is trading near record highs.

Chipmakers have been among the biggest beneficiaries of this year's AI-driven rally, fueled by expectations of heavy spending by hyperscalers. But concerns over stretched valuations and profit taking have recently injected volatility into the sector.