Why the good cheer? Five main factors:
First, companies in the S&P are actually doing quite well. With 95% of them having reported Q3 results, “earnings per share (EPS) growth is tracking over 13% … cruising past the 7.4% consensus forecast,” according to LPL Financial analysts Jeffrey Buchbinder, Adam Turnquist, and Brian Booe. “S&P 500 revenue grew 8.4%, an atypically strong 2.5% above expectations at quarter-end.”
The VIX “fear” index, which measures volatility, has declined 23.08% over the last five days, suggesting that stock investors have stopped being scared that an AI bubble will derail market momentum.
JPMorgan set a new target for the S&P for the end of 2026: 7,500, projecting “above-trend earnings growth of 13-15% for at least the next two years,” Dubravko Lakos-Bujas and his team told clients this morning.
And finally, it’s looking more and more likely that the U.S. Federal Reserve will cut interest rates again in December, delivering a new round of cheaper money, according to the CME’s Fedwatch tool, which currently rates the possibility of a cut at 84%.
Nvidia, in other words, is a fly in the market’s soup, but the soup still tastes pretty good. (Don’t cry too many tears for Nvidia investors, by the way, its stock is still up 32.41% year to date.)
Here’s a snapshot of the markets ahead of the opening bell in New York this morning:
