S&P 500 Surges 15% in Q2 as Chip Weight Hits Record 19.7%

The S&P 500 climbed 15% in Q2 2026, its strongest quarterly gain in six years, propelled by explosive AI-driven semiconductor demand. Chip stocks reached a record 19.7% index weight while the Magnificent Seven shed $2.3 trillion in market value amid rotation into names such as Micron, Intel, and AMD. Despite nearly 24% projected earnings growth, the Shiller CAPE ratio has stretched to 41x, leaving markets with scant margin for error if AI spending or profitability disappoints.