Monthly moves in the S&P 500 to two factors: changes in one-year forward earnings expectations, and changes in the multiple that investors are willing to pay for them. Here is a monthly disaggregation of SPX returns since the start of last year. most of this year’s gains have been driven by rising earnings expectations, but last month stalled as the contribution from multiple compression turned more negative. That monthly attribution of earnings dynamics to monthly index returns has a standard deviation of 2.0% since 1990; multiple expansion/compression has a standard deviation of 4.2%.In other words, risk appetite is a little more than twice as important as earnings in determining monthly changes in the S&P. The two are not totally independent of each other, but it’s not like they move in lockstep; since 1990, the contributions have a negative correlation of -0.23. It’s been even more negative than that over the past couple of years.