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S&P 500 hits record close as earnings power offsets labor worries

FactSet data show 86% of S&P 500 companies beat forecasts, while profit growth is above 50% and the week delivered gains across the major US indexes.

Reported · Written up by our desk · Indices

The S&P 500 posted its best week since April and closed at a record level, with gains attributed to strong corporate earnings and a reduced sense that the Fed will need to deliver additional rate hikes. The move followed a weak US employment report, which Action Forex said helped shift market expectations toward fewer hikes.

FactSet data cited in the coverage show that, among 440 S&P 500 companies that have already reported, 86% beat analysts' forecasts. Corporate profit growth is described as exceeding 50%, with Wall Street estimates also coming in 29% higher, figures the outlet says have not been seen since 2008.

The article notes that investor focus has been renewed on Big Tech, supporting a broader rally. Over the week, the S&P 500 and the Dow Jones Index rose more than 3%, while the Nasdaq Composite gained more than 5%.

Still, the piece warns that market “euphoria” leaves equities vulnerable to setbacks, pointing to geopolitical risks in the Middle East and upcoming US inflation data for July. While the outlet says a modest rise in consumer prices is expected that would argue against Fed tightening in September, accelerating inflation would raise the odds of a federal funds rate hike again and act as a headwind for the S&P 500.

Latest closeS&P 500 7,675.92 ▼0.4%|Nasdaq Comp. 26,749.30 ▼0.7%|Dow Jones 51,245.74 ▼0.5%

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