US Stocks Rally on Strong Earnings Amid Concentrated Growth
The US stock market has continued its impressive rally as major companies have reported strong second-quarter earnings. According to FactSet, about 86% of S&P 500 companies that have reported results beat analysts' estimates.
The index is on track for its seventh consecutive quarter of double-digit earnings growth, with blended earnings increasing by around 50%. Energy sector earnings rose over 147%, driven largely by higher oil prices linked to the Iran war.
AI spending continued to drive results across other sectors. Amazon's cloud-computing sales accelerated, causing a 15% jump in shares. Microsoft added a record $450 billion in market value after easing concerns about returns from data centers and chips.
However, earnings growth remains concentrated among Alphabet and Amazon, which accounted for around 71% of the increase in blended S&P 500 earnings since July. Excluding these companies would reduce growth to around 32%.