If you have forgotten to pay attention to S&P 500 (^GSPC) earnings estimates, put doing so back in your daily routine, even if it means missing a piece of news on the Strait of Hormuz.
Right now, profit estimates are back on the rise, powering markets to fresh records.
The S&P 500 has rallied 12% from its March 30 low, pushing the index beyond 7,000 for the first time last week amid hopes of an end to the US conflict with Iran. Meanwhile, consensus earnings estimates for 2026 and 2027 are 4% above January levels, Goldman Sachs strategist Ben Snider pointed out
The energy and information technology sectors have accounted for nearly all of the positive revision, with the median S&P 500 company experiencing no adjustment to 2026 earnings per share estimates over the past few months.
Chip player Micron (MU) and oil giant Exxon Mobil (XOM) have together accounted for more than 60% of the consensus revision to S&P 500 2026 EPS estimates since the start of the war.
Read more: Live coverage of corporate earnings
The sectors with the strongest revisions have generally outperformed.
“Strong recent earnings revisions have provided the fundamental backing for the equity market’s surge to new highs,” Snider said.
A continuation of the recent improvement in the geopolitical outlook should help broaden both the earnings outlook and equity market breadth, according to Snider.
By and large, the start to the first quarter earnings season has been solid, believe it or not.
Big banks like Goldman Sachs (GS), JPMorgan Chase (JPM), and Bank of America (BAC) reported better-than-expected results amid consumer resiliency.
PepsiCo (PEP) CEO Ramon Laguarta told Yahoo Finance that consumers haven’t buckled under the weight of $4-per-gallon gas, and the Frito-Lay owner also beat analyst profit forecasts and maintained its outlook.
“Markets climb a wall of worry,” Great Hill chairman Tom Hayes said on Yahoo Finance’s Opening Bid. “We all know in the short term, the market is a voting machine based on emotions and headlines. We saw that 10% drawdown in the S&P 500 on that short-term basis [due to the war]. But in the intermediate to long term, it’s a weighing machine based on fundamentals. And the fundamentals are good.”
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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