Is there still scope for another surge in the S&P 500?

Despite a favourable reaction to Intel’s consensus-beating financial results for Q2, concerns about the ability of the US hyperscalers and others to monetise huge investments in AI may continue to weigh on the S&P 500, which is also being affected by renewed escalations of hostilities in the Middle East. Our base case is that the rally in the index will resume later this year, before a substantial correction takes place in 2027. But we think there is also a possibility that it may have already peaked.