S&P 500 reaches record levels after summer selloff

The S&P 500 closed at 7798.99 on August 13, marking its 27th record high of the year. Six weeks earlier, the index was sliding through a July selloff that had investors quietly panic-refreshing their brokerage apps. By late August, the index had pulled back slightly to trade in the 7711 to 7731 range, still up roughly 13% year-to-date. What drove the rebound The recovery rests on two legs, and both are holding firm for now. First, corporate earnings came in strong, with second-quarter S&P 500 profit growth hitting approximately 33.5% year-over-year, the best showing since 2021. A significant portion of that came from companies riding the AI spending wave, where capital expenditures from major technology firms translated directly into outsized revenue beats across the supply chain. Second, inflation cooperated. July producer and consumer price data both came in cooler than expected, which had a predictable effect on rate-hike anxiety. Traders scaled back their bets on a September Federal Reserve move, and equities responded the way they usually do when the threat of tighter money recedes: by going up. The July pullback had been sharp enough to rattle nerves. The S&P 500 ...