In the Q1 earnings season, 446 S&P 500 companies (89.2% of the index) reported a notable rise in earnings, up 21.2% compared to last year, alongside a 10.3% increase in revenues. Approximately 79.6% of these companies exceeded EPS estimates, while 78% surpassed revenue expectations. This marks a significant improvement in overall earnings outlook driven predominantly by the Tech sector, which remains a key contributor to positive earnings revisions across various sectors.
For Q2 of 2026, earnings growth is projected at 21.7%, with revenues increasing by 10.2%. As a whole, total S&P 500 earnings for the year are expected to grow by 19.7%, a step up from the previous year’s 13.1%. This growth is supported by contributions from the Tech and Energy sectors, with expected earnings growth rates of 33.2% and 56.7%, respectively. In contrast, nine sectors, including Transportation and Consumer Discretionary, saw downward revisions in estimates.
The current trend indicates that all 16 Zacks sectors are expected to experience positive earnings growth in 2026, which underscores a broadening recovery in earnings across the index.
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