SPX, NDX Rally Rests On Earnings And Yields

The S&P 500 (SPX) is up about 8% year-to-date and the Nasdaq 100 (NDX) about 15%, with gains underpinned by better-than-expected earnings per share. The 10-year Treasury yield remains the key macro variable being tracked as it shapes discount rates for equity valuations, particularly in growth-heavy benchmarks.

Historically, periods like 2013-2014, 2016-2017 and 2020-2021 show that strong earnings and contained long-term yields have allowed SPX and NDX to sustain advances despite intermittent pullbacks. In those episodes, 3-5% setbacks tended to be absorbed so long as earnings revisions stayed positive and the 10-year yield did not climb far into territory viewed as restrictive.

Today, index-level earnings strength is heavily concentrated in mega-cap technology and growth constituents. Apple (AAPL), Microsoft (MSFT), NVIDIA (NVDA) and Alphabet (GOOGL) are central drivers of SPX and especially NDX earnings, with outsized influence on index trajectories relative to the broader US equities universe.

This concentration amplifies the sensitivity of SPX and NDX to shifts in both earnings expectations and the 10-year Treasury yield. As long as these companies continue to deliver strong EPS and the 10-year yield does not rise enough to significantly compress their valuation multiples, historical precedent suggests that recent gains can remain resilient even after short-term pullbacks.