S&P 500 breaches 7,000 points for the first time, lifted by AI optimism

The S&P 500 ‌breached ​the 7,000-point mark for the first ‌time on Wednesday, driven by unrelenting optimism over artificial intelligence and expectations of ​strong Big Tech earnings as well as monetary policy easing.

The benchmark index’s ascent between successive 1,000-point additions has quickened ‍in recent years, reflecting mounting investor ​confidence in the U.S. economy and corporate America.

It took about three years for the S&P 500 to ​rise to 5,000 ⁠points from 4,000, but only about nine months to jump from 5,000 to 6,000, which it reached in November 2024.

The index was last up 0.3% at 6,999.71 points, and headed for its sixth consecutive day of gains, its longest winning streak since October.

“You could definitely have a continuation on the rally ‌in equities if the earnings season shows that AI expenditure is bringing in revenues,” said Jeff Leschen, ​managing ‌director at Bramshill Investments.

“Expected rate ‍cuts by the ⁠Fed could also be a tailwind,” he added.

AI-linked optimism has been one of the key drivers of U.S. markets, pushing tech giants including Nvidia, Microsoft and Alphabet higher. Technology stocks account for nearly 50% of the S&P 500.

Expectations of interest rate cuts by the U.S. Federal Reserve have also buoyed risk appetite, with traders betting on two 25-basis point reductions in 2026 after the central bank lowered interest rates thrice last year.

The Fed ​is, however, widely expected to hold interest rates at its meeting later in the day.

Markets have rebounded to record highs following bouts of selloff earlier this month on worries related to the U.S.–NATO friction over Greenland, tariff uncertainty and doubts over the U.S. central bank’s independence.

Analysts expect profit for S&P 500 companies to increase 15.5% in 2026, an improvement from a 13.2% growth forecast for 2025, according to data compiled by LSEG.

Tech earnings, powered by AI boom, are largely expected to drive U.S. corporate growth in the fourth quarter, with the sector’s profit projected to rise about 27%, compared with an estimate of a 9.2% increase overall for S&P ​500 companies, LSEG data showed.

Revenue growth from the tech sector in the quarter was pegged at about 18%, compared with the estimate of a 7.3% rise for the S&P 500, the data showed.

The S&P 500 has rebounded nearly 45% from its lows in April 2025, when U.S. ​President Donald Trump’s tariffs had roiled global markets.

Stakes are high for earnings reports from U.S. megacap ‌companies ​this week, as investors seek proof that strong profit ‌growth will lift stocks this year, including evidence that artificial-intelligence investments are paying off.

Reports are due from Microsoft, Apple, Facebook ​parent Meta Platforms and Tesla - four of the “Magnificent Seven” megacap companies whose bottom-line results broadly are key drivers of overall U.S. profits. The group is expected to post a 21.5% rise in ‍earnings for the quarter, compared with a 5.3% gain ​for the rest of the S&P 500, according to Tajinder Dhillon, head of earnings research at LSEG.

“Expectations are very high,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial. “Particularly for ​Meta, Microsoft and Apple ⁠this week, there is less room for them to disappoint.”