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S&P 500 retreats from records as cooling US economy concerns grow

Second-quarter tech giant profits rose 31%, and the S&P 500’s forward P/E fell from 26 to 22 amid stronger earnings.

Reported · Written up by our desk · Indices

The S&P 500 has pulled back from record highs as investors weigh signs of a cooling US economy, including weaker employment and retail sales, deteriorating consumer sentiment, and slowing inflation, according to Action Forex.

The publication points to earnings strength as a key support, noting that profits at tech giants rose 31% in the second quarter, beating an already optimistic 23% forecast. About 90% of listed companies have reported results, and the index is on track for its best half-year earnings-per-share performance since 2021.

Action Forex also highlights valuation changes, saying the forward P/E ratio has dropped from 26 at the start of the year to 22, which it frames as evidence the market is not forming a bubble. It adds that Wall Street’s consensus forecast for the S&P 500 at the end of 2026 was raised to 7,894, with experts expecting at least an additional 1% increase, while earnings-per-share forecasts were lifted from 15% in January to 27%.

The brief also cites market positioning, saying the VIX has fallen to its lowest level since late December and that derivatives are pricing modest daily S&P 500 gains through the end of August, not exceeding 0.8%. Action Forex flags NVIDIA’s earnings report and the Jackson Hole Economic Symposium as key events to watch.

Latest closeS&P 500 7,785.76 ▼0.2%|VIX 14.25 ▼2.6%

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