The AI boom is back on, as tech lifts the S&P 500 to a new high, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.
AI stocks lead the way higher
The resurgence of AI names continues, pushing the S&P 500 to a new record high. A soft PPI reading adds to the impression of restrained inflation seen in yesterday’s CPI data, allowing investors to head back to the high-flying, but expensive, growth stocks. While the market goes through periodic worries about inflation, but the strong earnings on offer means that the temptation is irresistible. Further upside seems likely, barring a sudden resumption of Middle East hostilities.
Oil prices head lower
OPEC’s cut to its demand forecast helps to ease worries that the world will run out of oil and run straight into an energy crisis. With demand lower, the concerns about flows out of Hormuz diminish, and indications of higher than expected volumes emerging from that region add to the potential for a reversal in recent gains in the oil price.
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