The S&P 500 closed near its June 2 record high of 7,609.78 on Friday, with the forward P/E ratio standing at 20.4 while the Information Technology sector's forward P/E reached 23.0. According to analysis by Ed Yardeni on Investing.com India, this earnings-led rally represents a significant shift from the fear-of-missing-out (FOMO) driven market of the late 1990s. The current bull market is characterized by fabulous earnings momentum (FEMO) rather than P/E-driven irrational exuberance that marked previous market peaks.
Apple's Q2 FY2026 results demonstrated strong performance with revenue of $111.18 billion, up 17% year over year, beating the LSEG consensus of $109.66 billion. The company's EPS of $2.01 exceeded estimates, while gross margin of 49.3% was the highest in at least eight quarters. Services revenue reached $30.98 billion, above the $30.39 billion estimate, though iPhone revenue rose 22% year over year but missed segment estimates. Management guided Q3 FY2026 revenue growth of 14% to 17% and authorized an additional $100 billion in share repurchases. Cook described the current pricing environment as a "hundred-year flood," adding he's never seen anything like it in over 40 years.
The S&P 500 Information Technology analysts' consensus expected long-term earnings growth (LTEG) soared to 38.0% during the week of June 18, while the overall S&P 500 LTEG climbed to 23.1%. As reported by Investing.com India, both figures exceed their 2000 peaks of 28.7% and 18.7% respectively. The 14.9-point spread between IT and overall S&P 500 LTEG is wider than the 10.0-point gap at the 2000 peak, indicating the current momentum is even more concentrated in technology sectors.
The Information Technology and Communication Services sectors currently account for 47.2% of the S&P 500's market capitalization, with their combined forward earnings share representing 43.8% of the index. According to the analysis, this concentration is not necessarily indicative of irrational exuberance, as investors are not valuing these sectors' earnings outlooks as highly as during the tech bubble of the late 1990s. The S&P 500 forward EPS rose to $368.91 during the June 18 week, with projections of $340.82 for 2026 and $399.25 for 2027.
The Investors Intelligence Bull/Bear ratio stands at 2.45 against its long-run average of 2.59, while the AAII ratio is 0.93 against its 1.19 average. According to the analysis, there is no credit crunch underway as commercial bank loans and leases continue growing 7.3% year-over-year. The forward P/E spread between S&P 500 and S&P 400 has narrowed to 4.0, while the spread to S&P 600 stands at 4.3. Private-credit ETFs have rolled over with Virtus Private Credit down 3.3% over the past month.
