What's Next for the S&P 500? U.S. Earnings Season Recap
Date: 10 November 2026
Overview of Q3 2026 Earnings Season
The Q3 2026 earnings season has exceeded market expectations, with 88% of S&P 500 companies reporting results. The earnings growth rate stands at 31.4% year-over-year, marking the third consecutive quarter of growth above 25%. This growth is supported by both upward revisions in earnings per share (EPS) expectations and better-than-expected actual results.
Key Statistics
- 84% of companies beat EPS expectations.
- 74% delivered positive revenue surprises.
- Current earnings growth for the index is 31.4% year-over-year.
- Forward 12-month P/E ratio is at 17.7, below the 5-year average of 19.8.
Sector Performance
All 10 sectors reporting results have shown stronger earnings growth than anticipated. The Information Technology sector's forward P/E ratio is at its lowest since March 2020. The Energy sector has also seen significant growth, with 100% of reporting companies beating revenue estimates.
Outlook for Q4 2026
The outlook for Q4 remains positive, with 43 companies issuing positive EPS guidance compared to 32 with negative guidance. Analysts expect EPS growth of 28.4% for Q4 and 33.3% for the full year of 2026.
Revenue Growth
Revenue growth for the index has increased to 14.3% year-over-year. 74% of companies reported revenues above estimates, with an average surprise of 2.1%. This indicates that earnings growth is supported by solid top-line growth, not just margin improvements.
Trends in Earnings Surprises
While the percentage of companies beating EPS estimates remains high, the magnitude of these surprises has decreased. The average earnings surprise is currently 2.7%, significantly lower than historical averages. In contrast, revenue surprises remain robust, suggesting a healthy revenue environment.
Big Tech and CAPEX Trends
Big Tech companies are experiencing a slowdown in earnings growth compared to the broader index. However, capital expenditures (CAPEX) among major tech firms continue to rise, driven by investments in AI infrastructure. Companies like Oracle and Amazon have reported significant increases in CAPEX.
Market Technicals
The S&P 500 has shown a V-shaped recovery pattern, with key support levels identified around the 200-day EMA at approximately 7,450 points. The index needs to maintain above this level and recover past 7,750 points to sustain upward momentum.