Value & Risk Premium Compression Is Driving Equity Returns

Prometheus S&P 500 + Crisis Program

Aug 17, 2026

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We share the latest positions from our S&P 500 and Crisis Protection Programs.

Equity markets continue to grind higher, offering the most consistent trends in major macro markets from a US perspective:

These trends are currently being driven by an expansion of valuation multiples:

However, there remains an extremely strong undercurrent of earnings momentum, dominantly being driven by changes in technology earnings:

A substantial part of these earnings expectations can be explained by macroeconomic conditions, but a very large part also comes from bottom-up, non-macro factors:

Consistent with this dynamic, our macro factor decomposition of earnings continues to see equity returns driven by a compression in risk premiums:

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