AI trade shows new resilience, lifting S&P 500 past 7,000 (briefly)
US equities have weathered a choppy start to the year, facing new geopolitical, trade, and central bank risks without collapsing. And stocks kicked off Wednesday’s session on an optimistic note ahead of the Fed’s rate decision.
The catalyst behind the bump was a familiar one: artificial intelligence.
A renewed burst of AI bullishness briefly carried the S&P 500 above the 7,000 mark for the first time ever, even if those gains faded as the session wore on.
The story behind the milestone
Crossing 7K is seen as a significant signal for the large-cap index and the broader market. Big, round numbers like that tend to test investor confidence, and clearing them often reflects strong underlying sentiment.
As LPL Financial’s Jeff Buchbinder put it, the latest level represents a “very positive sign” from a technical standpoint. And institutional data backs up his assessment, with strong 2026 expectations for S&P profits and Q4 tech profits projected to handily beat the broader index.
AI spending is also broadening to include suppliers like Western Digital, Seagate, Micron, and data-center HVAC provider Comfort Systems USA, all of which have posted massive gains since late 2024.
Taken as a whole, the trendlines explain why the index’s climb has been accelerating. It took roughly three years to move from 4,000 to 5,000, less than a year to climb another 1,000 points, and just over 300 days to reach the latest milestone.
JPMorgan’s reality check
Strategists at one major institution are arguing that today’s AI-driven rally looks fundamentally different from previous tech bubbles. Unlike the dot-com era, companies are generating real revenue, showing productivity gains, and embedding AI into daily operations.JPMorgan’s data shows enterprise AI adoption rising sharply, with productivity improvements (particularly in software development and data analysis) already at measurable levels.
That said, risks remain in the form of tariffs, policy volatility, and a concentration of capital in a small group of megacap leaders. That means future pullbacks are likely, but investors shouldn’t necessarily confuse volatility for weakness.
Institutions are treating AI as a long-term play, not a passing trade, so focusing on earnings instead of headlines or index levels looks like a smart way to play an industry still feeling plenty of growing pains.