Strong earnings and AI spending keep markets afloat.

Strong earnings and AI spending keep markets afloat. Recent hyperscaler earnings have bolstered investor confidence in the broader market setup. While concerns persist about eventual CapEx normalization and potential overbuilding by major tech companies, the artificial intelligence spending cycle remains intact and driving growth. Corporate earnings are accelerating significantly, with FactSet lifting Q1 2026 growth expectations to 27.1 percent and full-year S&P 500 EPS growth to 21.3 percent despite geopolitical tensions and elevated oil prices. Market risks exist, but investors appear willing to look past current Middle East concerns as spillover effects remain limited. Core inflation metrics remain contained, supporting the current valuation environment.