Earnings-driven bull market can push S&P 500 to 9,000; inflation not a profit killer (with Tom Keene, Paul Sweeney)

Forward earnings have surged ~20% YTD, and even conservatively (12% growth) with current 22x multiple, S&P 500 could reach 9,000 by year-end. Inflation is higher-for-longer but historically does not compress nominal earnings; margins have held up. The rally is earnings-driven, not a bubble. Low VIX and compressed vol risk premium show complacency, but hedging is tricky in a low-correlation tech-led market. Real stagflation (1970s-style) is not the current scenario.

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Tallbacken Capital Advisors 3.0
Financial Advisory
Michael Purves 8.5

Earnings-driven bull market can push S&P 500 to 9,000; inflation not a profit killer (with Tom Keene, Paul Sweeney)

ndx

Purves argues the S&P 500 could reach 9,000 by year-end based on earnings growth and current multiples. The Nasdaq 100 (NDX) is heavily tech-weighted and would likely participate in or lead such a rally, especially given his emphasis on semiconductor leadership.

rut

Purves notes the Russell 2000 is up 38% year-to-date, which he presents as a positive data point. His overall bullish earnings thesis would support continued small-cap participation, though he does not explicitly forecast the RUT.

Michael Purves

Forward earnings estimates for the S&P 500 are up nearly 20% year-to-date; even taking a conservative 12% growth, with today's 22x multiple, the index could reach 9,000 by year-end.

This earnings growth came on the back of a very strong 2025 earnings year, not a trough. Some of the growth may reflect unusual accounting by big tech, but the underlying trend is robust.
Michael Purves

Inflation does not necessarily reduce earnings; historically it can inflate nominal earnings. Consumers buy coffee with nominal dollars, not real dollars.

Even sectors most exposed to inflation (staples, consumer discretionary) have forward earnings higher today than at the start of the year.
Michael Purves

The VIX has come in and the volatility risk premium has shrunk to uncomfortable levels, indicating complacency. But in a strong tech-led bull market, correlations go very low and stay low, making S&P put hedges tricky.

Put/call skew is not particularly elevated. The challenge is whether to hedge within the book (sector ETF or single stock) or buy VIX calls/S&P puts.
Michael Purves

Current nominal GDP is more skewed toward inflation than growth, but this is not stagflation. 1970s stagflation was 12% inflation and -2% growth; today's 2% real / 3% inflation is manageable and supports solid economic conditions.

Corporate earnings have grown through recent inflation, margins have held, and the top line has benefited from inflation.
Michael Purves

For long-term retail savings, adding to S&P 500 monthly is fine. The real story is gauging rotations—whether the semiconductor rally continues is key.

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