S&P 500 Likely to Report Earnings Growth Above 29% for Q2

Key Points:

• The S&P 500's estimated earnings growth rate for Q2 stands at 23.6%, potentially marking the second consecutive quarter with over 20% year-over-year growth, driven by most companies reporting earnings above estimates.
• Historically, actual earnings growth tends to exceed estimates, with the index surpassing estimated earnings growth in 37 of the past 40 quarters, often due to positive earnings surprises.
• Over the past decade, actual earnings have exceeded estimates by an average of 7.4%, leading to an average earnings growth rate increase of 6.2 percentage points during earnings seasons; applying this to Q2 suggests actual growth could reach 29.4%.
• More recent data from the past five years and four quarters show even higher average earnings surprises and growth rate increases, implying Q2 earnings growth could be as high as 31.7%, though a conservative estimate is around 29.4%.
• Early Q2 2026 reports indicate 89% of companies have beaten earnings estimates by 14.5% on average, nudging the earnings growth rate slightly higher to 23.6% so far, supporting the likelihood of a strong overall earnings season.