Recently, there has been an interesting shift in the market's upward logic.

From the data, this year to date, profit growth contributed 79% to the S&P 500 index returns. This is not a small figure—it indicates that the actual earnings of companies are driving stock prices, rather than investor sentiment. Moreover, this trend is continuing and is expected to achieve annual growth for the second consecutive year.

A more noteworthy detail is that profit contribution has increased by 24 percentage points year-over-year, nearly tripling since 2023. This shows that the improvement in fundamentals has moved from a trend last year to becoming mainstream this year.

On the other hand, the story of P/E ratio expansion becomes clear. The remaining 21% growth this year comes from valuation expansion, a proportion far lower than last year's 45% and 2023's 73%. To understand from another perspective: two years ago, the market mainly relied on "re-pricing" to boost itself, but now it is speaking through companies' earning capabilities.

What does this mean? The quality of market momentum is improving. The shift from virtual to real, with solid fundamentals, allows the splash to be higher.