Results have helped ease worries about AI spending and inflationary pressures as strong earnings reports from the U.S.’s largest companies power major indexes to new highs, easing concerns that the rally depends on a handful of AI stocks. Among the more than 440 S&P 500 companies reporting second‑quarter earnings, 86% have beaten analysts’ estimates, putting the index on track for a seventh consecutive quarter of double‑digit earnings growth. The robust performance suggests a solid core of corporate profitability that supports the market’s upward trajectory.

A string of upbeat reports from Palantir, Caterpillar, and Walt Disney this past week drove the market to its best weekly gains since April, reinforcing the record run. These results have reassured many that the market’s gains are backed by genuine earnings rather than just sector concentration.

Investors still face volatility‑fueling worries: the on‑again, off‑again war with Iran and new questions about how the Federal Reserve will fight inflation. Earnings growth remains heavily concentrated in energy and AI stocks, especially the soaring profits of memory companies supplying the AI build‑out. Nevertheless, concerns about geopolitical tensions and monetary policy persist, keeping volatility elevated.

Phil Blancato, chief market strategist at Osaic, said: These earnings are ridiculous, and These profit margins are incredible.