U.S. Stock Market Update
The S&P 500 reached a record high, closing above 7,600 for the first time on June 2, 2026, marking its 24th record of the year. Meanwhile, inflation is rising, with the personal consumption expenditures (PCE) price index hitting 3.8% year-over-year in April, the highest in nearly three years. This increase has raised concerns about potential interest rate hikes by the Federal Reserve, as it has maintained its benchmark rate between 3.50% and 3.75% since early 2026.
Big tech companies have taken on significant debt to fund AI initiatives, with Amazon, Alphabet, Meta, Microsoft, and Oracle issuing approximately $121 billion in U.S. corporate bonds in 2025. Higher interest rates could complicate their financial positions, particularly as these companies now account for about a third of the S&P 500’s value. The S&P 500 currently has a price-to-earnings ratio of around 26, significantly up from 23 a year ago, indicating heightened market valuations and potential risks ahead.
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