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1st Source Bank says higher bond yields have altered the fixed-income opportunity set, with investment-grade yields around 5%–6% and high-yield rates 6%–8%. The bank notes headline equity returns (S&P 500 up ~12%–13%) mask narrow participation: semiconductors—now roughly 15%–20% of the S&P 500 and up about 50% year-to-date—are a primary driver. The firm also highlights near-$1 trillion annual AI investment and concentration and financing risks that merit careful monitoring.
1st Source Bank reports that second‑quarter corporate earnings were strong, with earnings growth above 25% for a second consecutive quarter. The bank highlights that AI has broadened beyond tech — FactSet data showed AI was discussed in 331 of 493 S&P 500 earnings calls — and that energy, information technology, and materials provided the largest contributions to Q2 earnings growth. 1st Source notes third‑quarter aggregate earnings expectations around 28–29%, raising the bar for forward guidance.