Here's the stealthy reason stocks are at record highs
The S&P 500 has reached new highs due to rising earnings estimates, driven by the energy and information technology sectors. Companies like Micron and Exxon Mobil have significantly contributed to the positive revision in earnings estimates.
The S&P 500 has rallied 12% from its March 30 low, pushing the index beyond 7,000 amid hopes of an end to the US conflict with Iran. Consensus earnings estimates for 2026 and 2027 are 4% above January levels. The energy and information technology sectors have driven the positive revision, with Micron and Exxon Mobil accounting for over 60% of the consensus revision to S&P 500 2026 EPS estimates. The start to the first quarter earnings season has been solid, with big banks and companies like PepsiCo reporting better-than-expected results. A continuation of the recent improvement in the geopolitical outlook should help broaden both the earnings outlook and equity market breadth.
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