S&P 500 Hits 7,609.78 as AI Rally Extends Nine-Day Win Streak, June 03

The S&P 500 closed at 7,609.78, up 0.13%, marking its first close above the 7,600 level. The Dow Jones gained 228.91 points, or 0.45%, to 51,307.79, while the Nasdaq Composite edged up 0.03% to 27,093.90. All three indexes hit all-time highs and extended a nine-day winning streak, the longest since May 2025. Semiconductor stocks and AI-focused companies drove the rally as investors bet on massive spending by technology companies building artificial intelligence data centers.

Chip Stocks Lead the Charge

The Philadelphia Semiconductor Index surged nearly 6%, becoming the main engine of Tuesday’s gains. Marvell Technology rocketed 32% after Nvidia CEO Jensen Huang suggested the company could become the next trillion-dollar company. Hewlett Packard Enterprise jumped 19.5% after reporting second-quarter profits that beat analyst expectations, with the company crediting strong demand from customers building AI capabilities.

Alphabet Raises $80 Billion for AI Expansion

Alphabet announced an $80 billion capital raise, including a $10 billion investment from Berkshire Hathaway, to fund artificial intelligence development. The company plans to spend as much as $190 billion on equipment and investments this year. Alphabet shares fell 4% on the announcement, as investors weighed the massive capital commitment against the company’s AI ambitions.

Valuation Concerns Mount at Record Highs

The Shiller P/E ratio sits at 42.78, its second-highest point since topping out at 44.19 in 1999 before the dot-com crash. Some analysts warned that current valuations mirror pre-crash conditions seen in 1929, 2000, and 2008. The S&P 500 posted 29 new 52-week highs and 17 new lows, signaling mixed breadth beneath the index’s record close.

Technical Signals Show Overbought Conditions

Meyka’s technical analysis reveals the S&P 500 is overbought, with RSI at 75.37 and CCI at 121.89. The index trades above its 200-day moving average of 6,836.50, up 11.2% year-to-date. Despite these stretched conditions, the nine-day winning streak reflects investor conviction in AI spending and technology sector growth. Meyka rates the index a C+ with a 12-month target of $7,250.83, suggesting limited upside from current levels.

Final Thoughts

The S&P 500’s record close reflects AI enthusiasm overwhelming geopolitical risks, but overbought technicals and elevated valuations signal caution. With Meyka rating the index C+ and targeting $7,250.83, downside risk outweighs near-term gains.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.