The S&P 500 and Nasdaq Defy Gravity And Hit Record Highs

Markets abhor uncertainty, and today both the S&P 500 and Nasdaq rallied to record highs on the hope that the anxiety and overhang from the US / Iran conflict may be coming to a close. Now, we’ve been here before. In the past few weeks seemingly imminent ceasefires, agreements, or some other abatement in tension either never came to pass or were quickly reversed. And even with this enthusiastic jump in markets brent crude still sits above $100 a barrel, up from only $60 to start the year. So we still have a long way to go there. But if you look past that headline there is a lot more to the story.

While the hopes of a peace deal may have pushed the major indices to a record today that wouldn’t have been possible if the markets hadn’t had a remarkably strong last few years in the first place. What actually got us here was business fundamentals. The artificial intelligence boom now comprises a major single digit percentage of GDP, and the majority of GDP growth. Companies have been beating earnings left and right. According to Yahoo Finance, roughly 85% of companies reporting earnings recently beat expectations. AMD alone is up nearly 19% today, after already soaring 300% in the last year.

CNN’s ‘Fear & Greed Index’ shows a 68/100 rating. Spicy, but not white hot. The reason is many of the earnings wins are backed up by fundamental performance. Meta recently reported earnings that showed 33% revenue growth on the top line, up to $56.3 billion. That. Is. Staggering. I can’t recall another time a company this big, this profitable, has grown so quickly. They aren’t alone. Alphabet, Amazon, and other hyperscalers are seeing an acceleration in cloud spending.

These aren’t unproductive dollars. Companies simply would not be spending tens of billions of dollars on AWS, Azure, Meta, or YouTube ads for the sake of it. They are seeing real ROI, and the promise of artificial intelligence creating major efficiencies across all industries seems to be going from promise to reality.

So while it’s easy to say the AI boom is driven by euphoria (and hey, there certainly is some of that), it’s a real supercycle that is rewriting the US economy and drove the S&P 500 up nearly 7% YTD, after nearly 18% gains in 2025. The bottom line for investors and traders is that the market was already close to all time highs despite the uncertainty with Iran and US, and the promise of removing that cloud gave it the nudge to a new record.