Why diesel price and Treasury yield relief would be huge wins for stocks

If there is relief to be had from surging gas prices and rising Treasury yields soon, it could open the door for another thrust higher for the market.

That's a big if , but it's one to keep an eye on just like the power brokers on Wall Street.

"While AI strength has kept the headline S&P 500 relatively resilient, the median stock in the index trades 16% below its 52-week high, dragging market breadth to its lowest level since the Dot-Com Bubble," Goldman Sachs strategist Ben Snider said. "Together, these factors indicate the potential for both broad market upside and a 'catch-up' from recent laggards if macro uncertainty declines."

The S&P 500 ( ^GSPC ) continues to trade near record highs despite elevated oil prices and surging bond yields , underpinned by robust corporate earnings growth this year.

Analysts project aggregate third quarter S&P 500 earnings growth of nearly 29% year over year, providing a strong fundamental floor that absorbs elevated discount rates.

Further helping the S&P 500 is the return of the "Magnificent Seven" trade amid AI optimism, which has lit a renewed flame under names like Meta ( META ) and Nvidia ( NVDA ).

Outside of the AI complex, that's where things get hairy for the S&P 500, as there are a host of laggards.

McDonald's ( MCD ), PepsiCo ( PEP ), Lowe's ( LOW ), and Nike ( NKE ) are all hovering around 52-week lows.

Goldman's Snider is banking on improved market breadth supporting a higher S&P 500 in the next 12 months. He expects the S&P 500 to rise 13% to 8,700 over that span.

Brian Sozzi is Yahoo Finance's Executive Editor, host of the Sozzi Unleashed morning show, the ' Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories? Email brian.sozzi@yahoofinance.com.