S&P 500 hits a new high, why is Wall Street fervently betting?

Barclays has raised its S&P 500 target for the second time in three months, increasing its end-2025 target from 6,050 points to 6,450 points. This bold move reflects strong corporate earnings, the resilience of the U.S. economy, and market enthusiasm for artificial intelligence. Despite a significant slowdown in job growth and an unemployment rate rising to a four-year high of 4.3%, strategists believe that the growth theme of artificial intelligence, expectations for short-term interest rate cuts, and favorable seasonal factors will continue to support the stock market. Additionally, an increasing number of investors are adopting options strategies such as covered call options to hedge risks, lock in profits, and manage taxes, indicating that after the market reached record highs, investors are actively seeking new risk management and yield enhancement methods. The popularity of this strategy is also reflected in exchange-traded funds, with the total assets of derivative income strategy funds reaching $150 billion by the end of July, a significant increase from $7 billion in January 2020. The optimistic outlook from Wall Street institutions, combined with changes in investor behavior, constitutes the current strong momentum in the market