Return Drivers
The S&P 500 moved this year, but why? Gains can only come from earnings, the P/E multiple, buybacks, and currency. This page splits the move into those pieces.
| Data | Series | Provider |
|---|---|---|
| S&P 500, Mag-7 and dollar index | Live closes | Yahoo Finance |
| Trailing P/E anchors | 27.98 (Jan 1, 2026), 28.42 (Oct 1, 2025, the T12 start anchor) and 26.15 (Oct 1, 2026) | S&P Dow Jones Indices |
| Mag-7 earnings share, foreign-revenue share, forward P/E | Earnings Insight (Jul 2 and Oct 2, 2026) | FactSet |
| Buyback pace | Quarterly buyback report | S&P Dow Jones Indices |
| Index weights and top-10 concentration | Weights at Dec 31, 2025; SPY daily holdings (Oct 1, 2026) | S&P Dow Jones Indices; State Street |
Computed at load time from the live closes plus the dated anchors; anchors update as each new quarterly report is published.
About this page
A decomposition of what is actually pushing stock prices: how much of the market's return came from earnings growth versus multiple expansion, the Magnificent 7 versus the other 493, buybacks and the dollar.
The decomposition matters because the sources of return age differently. Earnings growth can compound indefinitely; multiple expansion is borrowed from the future, since valuations mean-revert over long horizons. A rally built mostly on expansion is living on borrowed time in a way an earnings-driven rally is not.
What is multiple expansion?
The market paying more per dollar of earnings: the P/E rising. Prices can climb without profits growing at all, and unwinding of that expansion is what makes expensive markets fragile.
What are the Magnificent 7?
The mega-cap technology leaders (Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta and Tesla) whose collective weight became so large that they can single-handedly determine whether the index rises or falls.
Why do buybacks matter for returns?
Buybacks shrink the share count, so the same profits are split across fewer shares, mechanically raising earnings per share. US buybacks have exceeded dividends for years, making them the quiet workhorse of shareholder return.