Earnings-Led Meltup

We have nothing to fear but nothing to fear. Stock investors have been fearless since the S&P 500 fell to the year's low on March 30, when war-related fears peaked. The index has soared 16.1% since then to a new record high.

Yesterday, we explained our Buzz Lightyear Theory (BLT) of the stock market. Investors have concluded that, thanks to AI, demand for "compute" will increase to infinity and beyond, and so will the earnings of the S&P 500, including the hyperscalers and the semiconductor companies, particularly those that manufacture memory chips.