Jin10 data reported on June 27, the S&P 500 index is approaching historical highs, but as the earnings season approaches, the foundation of this round of rise faces significant challenges. Due to tariff resistance still causing concern, Wall Street expects the benchmark index’s second-quarter profits to grow by only 2.8% year-on-year, which could be the smallest increase in two years. Estimates compiled by Yardeni Research show that only 6 of the 11 zones are expected to achieve profit growth, the lowest since the first quarter of 2023. Market observers warn that the current index valuation is too high, and either a surge in earnings or significant interest rate cuts will be needed to justify the current levels. Technical analysts also believe that unless more zones join the rise, the index may fall in the coming months. “The stock market rebound certainly carries risks,” said Sarah Hunt, chief market strategist at Alpine Woods Capital Investors. “One of the biggest questions right now is whether the deterioration in some zones will exceed the acceleration in others.”
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