Earnings season is helping to boost the mood for equity markets. Despite souring economic data at the tail end of Q1, the S&P 500 is on track to record about 12.4% YoY EPS growth for the quarter. This is in line with the pre-season expectation, and a modest slowdown from 13.2% YoY growth recorded in the January reporting season. However, the expectation for 2026 growth has only gone higher in recent weeks, boosted by the increase in expectations for the energy sector. Prior to the war, the energy sector was expected to be a drag on S&P 500 earnings this year, but over the last six weeks, expectations have soared. The sector is now expected to post earnings growth of more than 40% in 2026. Though higher energy prices are also eroding the outlook for other segments, such as discretionary and industrials, the energy sector boost has more than offset the downside effect on other segments.
Disclosure: HB Wealth is an SECregistered investment adviser. The information reflects the author’s views, opinions, and analyses as the publication date. The information is provided for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any investment product. This information contains forward-looking statements, predictions, and forecasts (“forward-looking statements”) concerning the belief and opinions in respect to the future. Forward-looking statements involve risks and uncertainties, and undue reliance should not be placed on them. There can be no assurance that forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. The information does not represent legal, tax, accounting, or investment advice; recipients should consult their respective advisors regarding such matters. Certain information herein is based on third-party sources believed to be reliable, but which have not been independently verified. Past performance is not a guarantee or indicator of future results; inherent in any investment is the risk of loss.
