The S&P 500 just completed its longest winning streak in nearly three decades, powered by the strongest earnings growth since 2021.
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S&P 500 scores 8-week winning streak as earnings fuel 17% rally
The S&P 500 climbed 17.3% over an eight-week run through May 22, its longest winning streak since June 1997, as earnings growth accelerated across the index.
"Earnings expectations have not just remained resilient in the face of economic headwinds — they have actually accelerated this year," said John Butters, senior earnings analyst at FactSet.
The Magnificent Seven tech companies reported earnings growth above 63%, while the broader S&P 500 posted a 17% expansion — the highest since 2021, according to FactSet. Nvidia led the charge with 85% revenue growth in its fiscal first quarter, with data center revenue climbing 92% to $75.2 billion. The chipmaker guided to roughly 95% revenue growth in the current quarter.
The rally has pushed the index to new all-time highs, reinforcing the "US exceptionalism" narrative that could attract further capital inflows. History shows the S&P 500 gained more than 22% in the year following the 1997 streak, with double-digit returns in five of six similar streaks since 1955, according to Ryan Detrick, chief market strategist at Carson Investment Research.
Sector Breadth and the AI Engine
Technology and communication services led the advance, with the AI supply chain — from chipmakers to cloud infrastructure providers — accounting for the bulk of the gains. The equal-weight S&P 500 lagged its market-cap-weighted counterpart, reflecting the concentrated nature of the rally in mega-cap names. Trading volume ran above the 20-day average as institutional investors rotated into growth exposure.
The Cboe Volatility Index fell to its lowest percentile in the trailing 12 months, confirming the absence of hedging demand as the rally extended.
What Could Disrupt the Pattern
The streak unfolded even as geopolitical tensions in Iran and concerns over the scale of AI capital spending weighed on investor confidence earlier in the year. Investors grew worried that tech companies' nearly $700 billion in planned AI infrastructure spending this year might outpace near-term revenue. But strong earnings reports from the largest tech companies eased those concerns, with executives across the sector reporting sustained demand for AI training and inference capacity.
Still, the S&P 500's concentration in a handful of mega-cap names leaves the index exposed to any pullback in AI-related spending. Nvidia's top three customers accounted for about 64% of accounts receivable in the latest quarter, up from roughly 56% the prior quarter, according to its filings. The company's supply commitments have swelled to about $145 billion, tying significant capital to forward demand assumptions.
This article is for informational purposes only and does not constitute investment advice.
[1] Earnings Analysis: US Exceptionalism[2] Why investors should brace for a stock correction after earnings season wraps up[3] The S&P 500 Just Did This for the First Time in Nearly 30 Years. Here's What Happens Next, According to History.[4] Review and preview: Shrugging off the shock[5] Nvidia Stock Has Struggled Over the Last Week. Here's What I Think Is Going On.
