S&P 500 Heads for Best Run in Nearly Four Years
The next few days will be crucial, with companies representing half of the S&P 500’s total market capitalization are set to report results.
Quick overview
- Major U.S. companies are showing unexpected resilience in their quarterly reports, marking one of Wall Street's strongest earnings seasons since the pandemic recovery.
- Approximately 70% of S&P 500 firms have exceeded revenue expectations, the highest share since late 2021.
- Despite new tariffs, U.S. corporations have defended their margins through price adjustments and cost reductions, with revenues exceeding forecasts by an average of 2.4%.
- The upcoming reports from major tech companies like Microsoft and Alphabet will be crucial for sustaining the positive market tone.
The quarterly reports from major U.S. companies reveal unexpected resilience in the face of tariffs, marking one of Wall Street’s strongest earnings seasons since the pandemic recovery.
The S&P 500 is on track for its best results season in almost four years, with most companies exceeding revenue expectations. According to Bloomberg Intelligence, about 70% of the index’s firms that have reported so far delivered higher-than-expected third-quarter sales — the highest share since late 2021, during the post-Covid rebound.
Despite the drag from new tariffs, U.S. corporations have largely managed to defend their margins through price adjustments and cost reductions. The magnitude of positive surprises is also notable: revenues have exceeded forecasts by an average of 2.4%, well above the historical 0.5%.
Analysts note that strong sales beats often correlate with inflation surprises, partly reflecting how companies have passed higher input costs onto consumers.
Outlook Turns Brighter for 2026
The macro backdrop continues to support optimism. The U.S. economy and labor market remain solid, while the Federal Reserve is expected to continue cutting interest rates. Against this backdrop, earnings projections for 2026 are becoming increasingly upbeat.
Although it’s still early in the season, analysts suggest that the pace of revenue growth may signal a more durable profit expansion. The rate of revenue beats is twice the historical average, and while large-cap tech remains the main driver, other sectors — including financials, real estate, materials, and utilities — are also posting double-digit earnings gains, according to Deutsche Bank.
Still, not everyone is fully optimistic. While the results offer a solid base for the market, replicating the same enthusiasm that fueled last season’s rally may prove difficult.
AI Giants Up Next
The next few days will be crucial, with companies representing half of the S&P 500’s total market capitalization — including Microsoft, Alphabet, and Meta — set to report.
For now, the upbeat start is helping sustain a constructive tone on Wall Street, supported by improving trade signals, strong bank results, and rising corporate guidance. According to JPMorgan, around 66% of S&P 500 firms have posted “double beats” — surpassing both revenue and profit forecasts — compared to an average of 51% over the past four quarters.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
