Business · Markets · 6 hrs ago
S&P 500 earnings season begins with high expectations and less room for surprises
US companies are beginning to report their third-quarter 2026 results, including firms in the S&P 500.
XP expects the index’s earnings per share to rise about 31% from a year earlier, slightly above the market’s 29% forecast.
Technology and energy companies have led the upward revisions to earnings estimates.
Unlike the usual pattern, estimates have risen rather than been cut ahead of the results, partly because of strength in semiconductors linked to artificial intelligence and higher oil prices.
That leaves less room for companies to beat expectations, and XP says investors will focus on whether businesses can maintain strong outlooks that support their current valuations.
The quarter also brought geopolitical tensions, oil prices above $100 a barrel and higher long-term US interest rates, while the Federal Reserve raised its benchmark rate for the first time in more than three years.
The S&P 500 gained 2% during the quarter, and major companies including JPMorgan, Johnson & Johnson and Bank of America are due to report in the coming days.
The third-quarter 2026 earnings season for S&P 500 companies begins with expectations of strong profit growth and less room for positive surprises.
XP projects aggregate earnings per share will rise about 31% from a year earlier, slightly above the market’s 29% expectation.
Estimates rose substantially in the months before the season, unlike the usual pattern of analysts cutting forecasts ahead of results.
XP says investors will focus on whether companies can support their current valuations with their forward guidance.
Technology and energy have been the main drivers of upward earnings estimate revisions.
- Who
- S&P 500 companies, with major reporters including JPMorgan, Johnson & Johnson, Goldman Sachs and Wells Fargo.
- What
- The third-quarter 2026 earnings season is beginning amid high expectations and reduced room for positive surprises.
- When
- The season begins in October 2026. Major companies are scheduled to report from October 13 to 15.
- Where
- The United States.
- Why
- Earnings estimates have risen substantially, raising the bar for companies and reducing the scope for results to beat expectations.
This story does not have two clearly opposing sides.
Besides, positive revisions by company began to lose steam in September, a sign that optimism is increasingly concentrated in a few names.
We see that, once again, from a price perspective, the relevant debate for the quarter is not whether expected growth will be achieved, but whether companies can sustain guidance in line with current valuations.
S&P 500 earnings-per-share estimates for the period stood at US$80.
Positive revisions by company began to lose momentum, according to XP.
Estimates had risen to US$89.55, and XP projected US$91 in earnings per share for the quarter.
Major companies were scheduled to report, including JPMorgan and Wells Fargo on October 13, Bank of America and Morgan Stanley on October 14, and TSM and Charles Schwab on October 15.
- XP forecast
- About 31% year-on-year growth in aggregate S&P 500 earnings per share
- Market expectation
- 29% year-on-year earnings-per-share growth
- XP quarterly estimate
- US$91 earnings per share, 1.6% above market consensus
- Historical estimate cuts
- About 2.6% on average for the third quarter since 2022
- Oil price
- Above US$100 per barrel during the quarter
Sources
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