S&P 500 Climbs Above February Peak Amid Cautious Market Sentiment

The S&P 500 has surged past its February high, marking a 20% rebound in just four months—a pace that outstripped most expectations. Yet the rally lacks the euphoria of previous highs. The index now sits a mere 0.5% above its February 19 peak, but the momentum feels tentative, underscored by muted trading volumes and uneven participation.

Corporate earnings outperformed forecasts last quarter, lifting forward estimates and slightly compressing valuations. The S&P 500 now trades at 22 times forward earnings, down from 22.5 in February. While still elevated historically, the market’s resilience reflects robust profits and sustained Federal Reserve liquidity. Notably, the equal-weighted S&P remains NEAR its decade average, revealing concentration risk as megacaps drive gains.

Wall Street’s confidence remains fragile. Strategists have dialed back year-end targets, with the median S&P 500 projection now at 6,057—2% below current levels. Investor sentiment surveys show a narrow spread between bulls and bears, suggesting skepticism persists despite the 27% rally from April lows.