S&P 500 Earnings Outlook is Leaning on Energy

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.

Line chart showing 2026 earnings estimates growth over time for four categories: Energy rises sharply to 41%, Discretionary ex-TSLA & AMZN to 17.8%, while S&P 500, Industrials, and Energy stay below 10%, from 02-06 to 04-17.

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Gina Martin Adams, CFA, CMT

Chief Market Strategist, Shareholder

Gina Martin Adams, CFA, CMT, is the Chief Market Strategist for HB Wealth. With more than 25 years of experience at leading global financial institutions, Adams brings deep expertise in market analysis, thematic research, and translating complex economic trends into actionable strategies. She collaborates with HB Wealth’s investment team to deliver timely market perspectives, share actionable insights, and enhance the firm’s visibility as a leading voice in the industry. She contributes to advancing proprietary research, supporting the development of new investment products, and enhancing the client experience through thought leadership and education. She pursues a top-down perspective and model-based approach, leveraging fundamental, technical, and quantitative perspectives to inform investment decisions, and frequently presents her views in the media and at industry conferences, professional associations and investment organizations.

Matthew Sanders

Senior Investment Research Analyst

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Michael Casper, CFA

Director, Senior Market Strategist

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