#sp-500

#sp-500

For now, it's... not. The Vanguard S&P 500 ETF ( NYSEMKT: VOO) is actually looking pretty healthy so far, up 0.2% premarket. And why is that? Perhaps investors are thinking all these layoffs, caused by cheap AI replacing expensive workers, and allowing corporate profits to rise. Or investors could be encouraged by the way oral arguments went before the Supreme Court yesterday, with the Justices apparently doubtful of President Trump's ability to legally and unilaterally impose tariffs on imports without Congressional assent.

The S&P 500 is starting to pick up speed going into late-October after experiencing a bit of volatility on the back of the government shutdown, new Trump tariff threats, and a few early quarterly earnings fumbles. Despite the temporary setbacks, the dip-buyers have been more than willing to brave the dips, and that's made it tough to score anything more than a 2% or so dip from the S&P's all-time highs.

The futures are trading higher on Tuesday after a strong start to the week on Wall Street. Traders were buoyed by positive news on the potential for a trade agreement with China and the potential resolution of the TikTok issue. With Wall Street ready for a deluge of earnings this week, the most important of which come from technology giants in the Magnificent 7, it may remain a task for the momentum-driven rally to keep moving higher. Still, with strong retail participation and new money pouring into the market from overseas, the run to 7000 on the S&P 500 is on and humming.

Perhaps one of the most important metrics long-term investors can forget about when building their portfolios is the cost of constructing these groupings of stocks. Indeed, whether it's outright cost (in the form of an expense ratio for owning an ETF) or the cost associated with the time and effort to research individual stocks and input them into one's portfolio (even if there are no associated trading fees for these moves), investing can be an expensive exercise.

Amazon led the way after jumping 10.3%. The retail giant was by far the strongest force pushing upward on the market after reporting profit for the latest quarter that blew past analysts' expectations. CEO Andy Jassy said growth for its booming cloud-computing business has reaccelerated back to a pace it hasn't seen since 2022. Because Amazon is so massive, worth roughly $2.4 trillion, its stock movements carry more weight on the S&P 500 than almost any other company's.

Income investors rarely chase the loudest headlines. They look for companies that mail out checks, no matter what the talking heads predict for next quarter, and the S&P 500 is still the most convenient hunting ground for that kind of reliability. The index has been shifting more towards growth due to the mega-cap stocks doing extremely well over the past three years, and then being joined in by a new group of AI stocks that have ballooned into the top rankings.

Bank of America Research has issued a fresh warning for equity investors: the S&P 500, now hovering near historic highs, is demonstrating elevated risk levels with 60% of the firm's proprietary "bear market signposts" flashing red-just shy of the point that has historically heralded a market peak. The bank's S&P 500 Relative Value Cheat Sheet, published Monday, reflected growing caution among the team led by Head of U.S. Equity Strategy Savita Subramanian.

In the absence of macro jobs data due to the U.S. government shutdown, traders are piling into AI stocks, ING told clients this morning. "Financial market volatility is falling across the board, partly driven by the US government shutdown and the delay to key data releases such as the September jobs data. Instead, investors remain transfixed by the AI-driven rally in megacap tech shares, which shows no signs of slowing."

Well-known hedge funds, including Balyasny and ExodusPoint, made money last month, building on their gains as they enter the last quarter of 2025. Dmitry Balyasny's eponymous firm returned 1.3% in September, boosting its 2025 returns to 10%, a person close to the manager said. Michael Gelband's ExodusPoint continued its strong year with a 2% gain in September, according to an individual familiar with the New York-based asset manager. It's now up 12.3% for 2025.

As a barometer of US industrial and corporate economic health, the S&P 500 Index has few equals. Over the past decade, less than 15% of professional large-cap fund managers have been able to surpass the performance of the S&P 500. In fact, no less an investing authority than Warren Buffett cited in the 2013 Berkshire Hathaway shareholder letter: " The goal of the non-professional should not be to pick winners...instead, seek to own a cross-section of businesses that in aggregate are bound to do well. An S&P 500 index fund will achieve this goal."

Fortune's Shawn Tully points out that the S&P 500's price-to-earnings ratio just hit 30, which often signals impending doom. "A PE of 30 means big cap stocks are really, really expensive by historical standards. It also signals that from these heights, the chance for big returns going forward over any extended period are low, and the risks of a sharp 'reversion to the mean' downdraft is far more likely," he wrote on Tuesday.

On August 28, the S&P 500's price-to-earnings ratio reached a towering reading of nearly 30, the actual number that day was a whisker short at 29.85. Now it's official: Around 3 PM on Monday, September 22, the big cap index sailed beyond that historic barrier, gaining 32 points or 0.48%, a surge that pushed the multiple over the landmark to 30.09.

"rolling recession,"

At present, the fundamental backdrop remains fairly favourable as the U.S. labour market has cooled, helping yields and the U.S. dollar ease, thereby partially relieving discount pressure on equity valuations, especially for interest-rate-sensitive groups. However, part of the rate-cut expectations has already been priced in, so the index's positive reaction tends to be selective and depends heavily on upcoming data as well as the message at the FOMC meeting.

One unexpected side effect of the Magnificent 7's race to build massive AI data centers-and source the power needed to run them-is that they are reducing share buybacks to fund them, according to Goldman Sachs. Companies routinely buy back their own shares to incentivize investors for holding them, to reduce the number of shares available (thus boosting earnings per share), and to boost their own stock prices.

Dubbed the " September Effect," this phenomenon sees the S&P 500 averaging a negative 0.8% return since 1926, the only month with a consistent negative average over nearly a century. Theories abound as to why: from portfolio rebalancing by institutional investors to tax-loss harvesting and post-vacation market jitters.

High-yield ETFs have been quite the buzz this year. While covered call ETFs (or premium income, as some are referred to) are really nothing new for the world of passive investors, I do think that many of the swollen yields have attracted investor attention due to the lower (and falling) yields, particularly in the defensive dividend stocks, which have also had decent years. Indeed, there seems to be somewhat less yield going around, and not enough to satiate some of the more aggressive passive income investors out there.

A far less famous ETF has delivered 20.14% in gains year-to-date (~130% better than the VOO). This is even better than the 10.4% that the QQQ returned. The Invesco S&P 500 Momentum ETF (NYSEARCA:SPMO ) is the ETF in question. It still invests inside the S&P 500, but the index re-weights and puts extra money into the names with the strongest price momentum, cutting loose the laggards.

The S&P 500 is up 10% year-to-date, powered by the 'Magnificent Seven' tech giants whose foreign-heavy revenues are being boosted by the weaker dollar. Concentration in the top 10 stocks is at its highest since the 1960s, with earnings strength - 83% of companies beating estimates - driving sentiment.