As the corporate earnings season unfolds, JPMorgan Chase reported a rare bottom line miss, while Wells Fargo's Q3 results were mixed. Citigroup's earnings exceeded estimates, but its revenue was only slightly above consensus. Goldman Sachs, however, delivered a strong performance with significant beats on both revenue and earnings.
UnitedHealth also surpassed expectations and raised its full-year profit outlook. Despite this uneven start, FactSet data indicates that year-on-year S&P 500 earnings growth is tracking at nearly 30%, primarily driven by the energy and tech sectors. Oil companies are expected to see substantial profit increases due to elevated oil prices amid ongoing geopolitical tensions in the Middle East.
The tech sector is anticipated to continue benefiting from the artificial intelligence boom. However, growth outside these sectors is decelerating, with S&P 500 earnings growth excluding tech and energy projected to slow to 7% in Q3 from 12% in Q2.
This disparity in earnings growth is not unexpected, as tech and energy have been the standout sectors, with gains of 36% and 49%, respectively, in 2026.
Analysts from Bank of America caution that the high earnings expectations for chipmakers and energy firms—forecasted at 130% and 122% growth year-over-year—could pose risks if not met, particularly as the broader market experiences slowing growth.
The sustainability of index earnings per share (EPS) is closely tied to the ongoing capital expenditures in AI and the successful monetization of these investments, but factors such as rising capital costs and geopolitical challenges could complicate this narrative