S&P 500 Holds Near 7,500 as Earnings Bubble Warnings Intensify

The S&P 500 remains near 7,500 after a 15% Q2 rally and 10% YTD gain, buoyed by record earnings upgrades. Wall Street now projects 25% profit growth over the next year, the fastest pace since the post-Covid rebound, which has so far contained valuation concerns despite the Shiller CAPE ratio reaching 42.84 in mid-June. However, strategists at GMO, UBS, Nordea, and Bank of America are increasingly warning that AI-driven capex may prove unsustainable, shifting focus from stretched multiples to an emerging earnings bubble ahead of Q2 results.