Earnings have carried the index about 12% higher this year, through rate and oil shocks
Full-year earnings from S&P 500 companies are expected to rise 35 percent, the highest rate since 2021.
Reuters reported the projection as companies begin reporting third-quarter results, noting the 2021 figure was skewed by the post-pandemic economic rebound.
That growth has lifted the S&P 500 about 12 percent this year, overcoming rising interest rates, the US Federal Reserve's hawkish turn, and the Middle East conflict and related oil price spike.
According to LSEG Datastream data cited by Reuters, the forward price-to-earnings ratio for the S&P 500, which assigns a value to the index's expected profits, has fallen to 19.2 from 22 at the start of the year and from a recent peak of 23.5 in October 2025.
Walter Todd, chief investment officer at Greenwood Capital in South Carolina, told Reuters that he and other investors are "questioning the durability" of the earnings numbers.
He said comparisons will be harder next year for many of these companies.
S&P 500 earnings are expected to rise 15 percent in 2027, according to LSEG IBES, slowing as AI capital spending decelerates and companies face difficult comparisons.
Barclays equity strategists put the median annualized growth rate over the past 35 years at 10 percent, Reuters reported, which the 2027 level would top.
The S&P 500 technology sector's forward price-to-earnings ratio has dropped to about 21 from 26 at the start of the year.
Goldman Sachs equity strategists said in a note last week that the median AI infrastructure stock now trades at 22 times forward earnings estimates, down from 32 in April.
They added that many market participants doubt the durability of AI infrastructure earnings and that market pricing reflects that view at least in part.
Five AI hyperscalers are expected to spend just over US$800bn this year, rising to US$1.1tn next year, according to Goldman.
Reuters reported that rate is moderating from an increase of nearly 100 percent this year to 37 percent next year.
With AI spending, "the rate of that change that will determine to a large extent how the stock market does next year," said Peter Tuz, president of Chase Investment Counsel, in comments to Reuters.
Tuz added that a falloff in data-centre building due to regulatory or community pushback is a wild card.
US equity funds recorded inflows for a second consecutive week through September 30, drawing net purchases of US$20.6bn against US$37.49bn the previous week, LSEG Lipper data showed.
Ten-year Treasury yields reached 24-year highs during the period, Reuters reported.
The PCE price index for August rose 0.3 percent from July and 3.4 percent from a year earlier, the Bureau of Economic Analysis said on September 30.
Excluding food and energy, it rose 0.2 percent on the month and 3.0 percent on the year.
The Federal Open Market Committee raised the target range for the federal funds rate by a quarter percentage point to 3.75 to 4 percent on September 16, in a 12-0 vote, stating that inflation remains elevated.
Its next scheduled meeting is October 27 and 28.
US large-cap equity funds attracted US$19.33bn, their second-largest weekly inflow in the past quarter, per LSEG Lipper.
Money market funds posted weekly outflows of US$41.36bn, a third week of net redemptions in the past four.
Michael Arone, chief investment strategist at State Street Investment Management, told Reuters that investors have "underestimated the strength in earnings" at every turn.
He understands why that raises questions about sustainability, but said "you need a catalyst for this to end."
