Fully 90% of S&P 500 Earnings Growth and 100% of 2025 GDP Gains Have Come From the AI Boom!
Even after the recent upward revision to Q2 GDP growth, the non-AI sections of the economy are flat. Tech and Communication Services are accounting for an increasingly larger share of earnings growth.
Key Takeaways
Strong Data Releases Cause Lower Rate-Cut Assessments: The stock market clearly is in a “bad news is good news” mode because yesterday the good news turned out to be bad news. The good news was the raft of decent economic data from the upward Q2 GDP revision, jobless claims, and durable goods orders, which caused a mild hiccup in bond yields and a reassessment of the Fed. The stock market is salivating over rate-cut prospects, but there was less of this yesterday as the odds of an October Fed easing were trimmed to 88% yesterday from 93% the day prior; and down to 68% for December from 80%.
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