S&P 500 Reaches Record High in May Amid Higher Gasoline Prices

The S&P 500 reached a new record on Wednesday, marking its ninth record close in May. The index advanced even as gasoline prices rose and consumer confidence declined. Goldman Sachs raised its year-end target for the S&P 500 to 8,000, about 6 percent above the current level. The firm cited stronger-than-expected corporate earnings and productivity gains linked to artificial intelligence.

Technology companies reported average earnings growth of 50 percent in the first quarter, compared with a typical 10 percent increase. Non-technology companies posted 20 percent earnings growth, double the usual rate. Lower tax rates enacted last year contributed to the profit increases, according to LPL Financial chief equity strategist Jeff Buchbinder.

The faster earnings growth reduced the S&P 500's forward price-to-earnings ratio to 21 from 23 at the end of 2025.

Investors are also monitoring developments in artificial intelligence. deVere Group CEO Nigel Green stated that investors expect AI to increase productivity across the economy. U.S. and Iran. Gavekal Research analyst Tom Holland wrote that any preliminary agreement could lower oil prices and ease bond yields.

Ameriprise chief market strategist Anthony Saglimbene noted that higher bond yields and persistent inflation could limit further gains. He said the market's direction depends on whether interest rates stabilize and whether growth continues without renewed inflation.