S&P 500: Solid Earnings Growth
From Traditional Industry to Technological Leadership
The S&P 500 continues to show strength in 2025. While multiples have expanded, this movement is accompanied by positive year-over-year (YoY) earnings growth, confirming that this is not a speculative rally but an expansion supported by results.
The Barometer of the Global Economy and the Digital Revolution
The Evolution of the S&P 500
The S&P 500 has recorded positive performance in 2025, with corporate earnings growing around 8% year-on-year, mainly driven by large technology, health, and consumer companies. Although the market operates at valuation levels above the historical average, with multiples close to 19 times expected earnings, this increase is backed by effective results and not by empty expectations. In other words, companies are earning more and expanding their businesses, which supports the price rebound.
Far from being a cause for alarm, the expansion of multiples should be interpreted as a validation that the market recognizes the strength of leading companies. Margins remain stable, balance sheets are solid, and cash flow generation has surprised positively in several sectors, providing confidence for the long term.
A central point is how the composition of the index has evolved. In its early days, the S&P 500 was a reflection of the traditional U.S. economy: industrial, energy, and financial companies predominated.
Today, however, more than 30% of the index is concentrated in large tech companies, making it a direct thermometer of digital advancement and global innovation. This structural change is part of the reason why the index has generated extraordinary returns over the last decade, reflecting not only the economic dynamism of the U.S. but also the transition towards an increasingly technological world of high market cap companies.
In conclusion, the S&P 500 combines somewhat more demanding valuations with corporate results that are genuinely growing, providing reassurance and a perspective of continuity in value creation. For investors, this means participating in the evolution of an index that has shifted from reflecting the old industrial economy to being at the forefront of the technological revolution and one of the most attractive pillars of global investment.