S&P 500 closes above 7,800 for the first time

Good morning. Last night AI chipmakers pushed the S&P 500 above 7,800 for the first time ever, with the Nasdaq setting a record alongside it. With Treasury yields and oil taking a breather, chip stocks led by Nvidia found their legs again.

Here's the interesting part: analysts say stocks actually got cheaper while the index rose. Earnings are growing faster than prices, so the forward price-to-earnings ratio slipped from about 20 to 19, and chip-sector profits have more than doubled in a year. The concern about a handful of big stocks doing all the lifting remains, though. One critic called the S&P 500 a funhouse mirror rather than a gauge of market health.

Underneath, rates are still a weight. The 10-year yield pulled back a bit after topping 5.3%, but the fast rise has dulled the appeal of dividend favorites like REITs and utilities. Markets see the Fed holding in October and possibly hiking in December. Ray Dalio warned that the US could face a debt crisis within three years.

On energy, the US Energy Information Administration raised its oil price forecasts again, saying the Iran war is draining global stockpiles. Still, oil itself slipped below $100 a barrel yesterday as Middle East shipments recovered quickly.