Liquidity Is Driving the S&P 500
It’s not just about AI hype.
Liquidity remains a major driver of the market.
The $S&P 500(.SPX)$ has been closely tracking Global M2 with an approximately 11-week lag, and that relationship is currently pointing toward a potential 8,200 level for the index.
At the same time, the AI infrastructure boom is starting to show up in corporate earnings.
Massive spending on data centers, chips, power, networking and related infrastructure is creating a broad earnings tailwind across the market.
The combination of expanding liquidity and accelerating AI-driven earnings could provide the S&P 500 with another leg higher.
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