Stock Market Posts Record Highs as Investors Bet Economy Can Weather Energy Shock
The S&P 500 and Nasdaq reached all-time highs in early May 2026 as investors bet the resilient U.S. economy can absorb the Iran war's oil price shock. Major tech companies are driving growth through massive AI capital spending reaching $700 billion annually.
Market Reaches New Peaks
The S&P 500 rose to a fresh all-time intraday high on May 1, boosted by Apple shares, advancing 0.29% to 7,230.12, while the Nasdaq Composite added 0.89%, reaching an all-time high at 25,114.44. The S&P 500 Index and Nasdaq Composite forged new all-time highs, with 10 of 11 sectors up, sealing April with 10% gains for the broader market that were its best month in five years.
AI Capex Driving Growth
AI capex or capital spending isn't slowing, as outlays could approach $700 billion in 2026, with markets rewarding AI spending that shows near-term monetization like Alphabet's results. Apple climbed more than 3% after posting a fiscal second-quarter earnings and revenue beat, with revenue outlook for the current quarter better than expected.
Risk Assessment
The market isn't a mirror but a prediction engine where investors believe risk is appropriately priced into stock prices, with markets making judgements that the global economy and corporate earnings can absorb geopolitical shocks.