S&P 500 Posts Strongest Earnings Growth Since 2021

The second-quarter earnings season is delivering the strongest profit surge in nearly five years, with 86% of reporting S&P 500 companies beating analyst EPS estimates, according to FactSet data as of July 24. The blended earnings growth rate stands at 37.9% year-on-year, the highest since Q3 2021, though Alphabet’s one-off $98 billion gain inflated the aggregate figure. Excluding Alphabet, growth would still be a solid 25.9%.

Revenue growth is also robust, with 80% of companies exceeding sales estimates and blended revenue up 13.2% year-on-year, potentially the strongest since mid-2022. Ten of 11 sectors report positive earnings growth, led by Energy, Communication Services, Information Technology and Materials, while Healthcare remains the only decliner.

Attention now turns to a critical week ahead, with 177 S&P 500 firms—including nine Dow Jones components—reporting. Major technology names such as Microsoft, Meta, Amazon, Apple and ASE Technology are due, and their forward guidance on AI monetization, capital spending and tariffs will be closely watched. The S&P 500 currently trades at a forward P/E of about 21.1, slightly above historical averages, leaving limited room for disappointment should corporate outlooks weaken.