As summer approaches and warm weather has finally shown up, earnings season has given us a great opportunity to look under the hood of some of the largest companies in the world and provide a quick update. Up to this point, we have seen an encouraging tone as we move toward the finish line of this quarter’s cycle.
One of the first metrics we reviewed is the market as a whole, where S&P 500 earnings are tracking roughly +27% year-over-year growth, with about 84% of companies beating estimates. That combination points to a market where corporate results are still coming in stronger than expected and holding up well overall. At the same time, the broader story has not fully shifted. A meaningful portion of the strength is still coming from a smaller group of companies. The “Magnificent Seven” continue to do much of the heavy lifting, while results across the rest of the market have been more mixed. This is not necessarily a concern, but it does mean the market is still leaning on a relatively narrow group of leaders. While this isn’t quite as concentrated as it has been, it remains something we are continuing to monitor.
One encouraging trend this quarter is that expectations are actually moving higher as companies report. Forward estimates have edged up, which is not typical during earnings season and suggests there is still confidence in the outlook, largely tied to ongoing investment in AI and related technologies. Delivering on these forecasts will be key as the next wave of earnings approaches.
We’ve included a scorecard with this update to give a quick snapshot of how earnings season is progressing so far, along with a few notes from our partners at LPL to help put these trends into perspective.
Looking ahead, we are not quite done yet. There are still a few important reports to come, most notably NVIDIA (NVDA). Given its size and central role in the AI story, its results will likely have an outsized impact, not just on tech but on overall market sentiment and whether this momentum can continue.
Bottom line: It has been a strong start to earnings season with solid momentum overall. As we move forward, the next phase for the market will likely depend on whether that strength begins to broaden and how well it can navigate the evolving external risks. We will continue to emphasize balance while closely monitoring trends at both the macro and micro levels, positioning portfolios for growth while providing protection across a range of potential market conditions.
If I can provide any additional color on the details above, or if our team can help in any way, please do not hesitate to reach out. Enjoy the final weeks of spring and have a fantastic transition to summer!
Take care,
Grant
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