A Broad-Based Rally

The equity-market rally is broadening beyond megacap technology because earnings growth is stronger and more widely distributed than expected.

• The S&P 500 Equal Weight Index gained 15.4% year to date through September 4, 2026, outperforming the capitalization-weighted S&P 500.
• Investors are finding growth opportunities in energy, financial services, healthcare, and other sectors beyond semiconductors and technology.
• The authors argue that earnings growth, rather than further valuation-multiple expansion, is supporting the market despite relatively high interest rates.
• Artificial intelligence remains a major growth driver, but its benefits are spreading from hyperscalers and chipmakers to companies in other industries using AI to improve productivity and profits.
• Persistent inflation and restrictive long-term bond yields are identified as the main threats, while a Federal Reserve rate hike is seen as a smaller risk that could even stabilize long-term yields.

Takeaway: Horizon expects broad-based equities to remain supported if earnings strength continues, but investors should monitor upcoming inflation data and long-term bond yields because they could determine whether the summer trend persists.