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Q1 Earnings Season to Gain Momentum: What Will it Show?
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Key Takeaways
The Q1 earnings season gains momentum next week, with big banks helping headline the schedule.
Positive revisions have expanded beyond the Tech. sector, with the trend strengthening over recent weeks.
Q1 earnings are currently expected to be up 13.1% YoY on 9.0% higher revenues.
The market’s undivided attention has been centered on the conflict in the Middle East and its potential impact on the U.S. and global economic outlook.
Friday’s CPI reading showed that the conflict’s inflationary effect is mostly confined to the energy category at this stage, but it will justifiably feed worries that elevated energy prices could eventually bleed into other product categories, as hinted at by the University of Michigan sentiment survey that also came out on Friday. Market participants will be hoping for reassuring headlines out of Islamabad, where negotiations about the conflict will be taking place.
We can hope that headlines about the conflict don’t steal the thunder from the Q1 earnings season, which also takes center stage this week, with more than 60 companies reporting March-quarter results, including 28 S&P 500 members. Banks, brokers, and insurers dominate this week’s reporting docket, but we also have a sprinkling of operators from other sectors reporting results, including Johnson & Johnson, Pepsi, Netflix, J.B. Hunt, and others.
We expect the 2026 Q1 earnings report card to show continued strength and momentum, though market enthusiasm for the March-quarter numbers will likely be tempered by geopolitics-driven macro uncertainty.
Regular readers of our earnings commentary are familiar with the steadily improving earnings outlook we have consistently highlighted over the past year. This improvement in the earnings outlook has been driven mostly by the Tech sector over the past year, with positive Tech sector estimate revisions offsetting negative revisions elsewhere, keeping the aggregate revisions trend in the neutral-to-positive direction.
What has changed over the last couple of quarters is that the positive revisions trend has expanded beyond its aforementioned Tech sector core. We saw this ahead of the start of the last earnings season (2025 Q4), and the trend has strengthened further in the run-up to the start of the 2026 Q1 earnings season.
This context is important to keep in mind as we receive the Q1 earnings reports in the coming days and evaluate how estimates for Q2 and beyond are evolving.
For 2026 Q1, the expectation is that S&P 500 earnings will increase by +13.1% from the same period last year on +9% higher revenues. The chart below shows how Q1 earnings growth expectations have evolved over time.
Image Source: Zacks Investment Research
Estimates have moved higher for 7 of the 16 Zacks sectors since the quarter got underway in January. Q1 estimates have increased for Tech, which has been the consistent trend for more than a year now, but Q1 estimates have also moved higher for the Energy, Basic Materials, Industrials, Construction, Finance, and Business Services sectors.
Rising estimates for the Energy sector are tied to developments in the Middle East, with the sector’s revisions trend shifting from negative in the first two months of the quarter to positive in March. We should note that the revisions trend has remained positive for each of these 6 sectors since the start of the conflict as well.
On the negative side, Q1 estimates have been cut for 9 of the 16 Zacks sectors since the start of the quarter, with the most estimates pressure at the Autos, Medical, Consumer Discretionary, and Utilities sectors.
The Earnings Big Picture
The chart below shows the Q1 earnings and revenue growth expectations in the context of where growth has been in the preceding four quarters and what is expected in the coming three quarters.
Image Source: Zacks Investment Research
The two sets of charts below divide the S&P 500 index into cyclical and non-cyclical sectors, with cyclical sectors accounting for 43.2% of total 2026 Q1 index earnings and non-cyclical sectors accounting for 56.8%.
The cyclical grouping includes the 11 Zacks sectors, out of the 16 in the index, that can broadly be described as ‘cyclical’. These include Consumer Discretionary, Retail, Autos, Basic Materials, Industrials, Construction, Conglomerates, Energy, Finance, Transportation, and Business Services.
Image Source: Zacks Investment Research
The non-cyclical grouping includes Consumer Staples, Medical, Technology, Aerospace, and Utilities.
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture on a calendar-year basis, with double-digit earnings growth expected in 2026 (and the next two years).
Image Source: Zacks Investment Research
2026 Q1 Earnings Season Scorecard
The 2026 Q1 earnings season will take the spotlight with Monday’s Goldman Sachs (GS - Free Report) release, but the reporting cycle has actually gotten underway already, with 20 S&P 500 members reporting results in recent days for their fiscal quarters ending in February. All of these companies with fiscal quarters ending in February, including bellwethers like Nike, Oracle, FedEx, and others, are counted as part of our March-quarter tally.
Total earnings for these 20 index members that have reported results already are up +76.6% from the same period last year on +15.2% higher revenues, with 75% beating EPS estimates and 85% beating revenue estimates.
The comparison charts below put the growth rates for the companies that have reported with what we had seen from this same group of companies in other recent periods.
Image Source: Zacks Investment Research
The comparison charts below put the Q1 EPS and revenue beats percentages for this group of companies relative to what we had seen from them in other recent periods.
Image Source: Zacks Investment Research
Bank Earnings in Focus
The Finance sector will be front and center this week, with Goldman Sachs (GS - Free Report) reporting on Monday, JPMorgan (JPM - Free Report) and other big banks on Tuesday, Morgan Stanley (MS - Free Report) and others on Wednesday, and so on.
Total Q1 earnings for the Zacks Finance sector are expected to +19.9% from the same period last year on +9.2% higher revenues. This would follow the sector’s +17.3% earnings growth on +7.4% higher revenues in the preceding period.
The chart below shows the one-year performance of Goldman Sachs shares relative to Morgan Stanley, JPMorgan, and the S&P 500 index.
Image Source: Zacks Investment Research
As you can see, Goldman Sachs and Morgan Stanley shares have outperformed JPMorgan and the broader market, reflecting expectations of a rebound in investment banking activity and robust trading volumes.
The chart below shows the sector’s 2026 Q1 earnings and revenue growth expectations in the context of what we saw from the group in the last two quarters and expectations for the following four quarters.
Image Source: Zacks Investment Research
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>> What Can Investors Expect from Bank Earnings?
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Q1 Earnings Season to Gain Momentum: What Will it Show?
Key Takeaways
The market’s undivided attention has been centered on the conflict in the Middle East and its potential impact on the U.S. and global economic outlook.
Friday’s CPI reading showed that the conflict’s inflationary effect is mostly confined to the energy category at this stage, but it will justifiably feed worries that elevated energy prices could eventually bleed into other product categories, as hinted at by the University of Michigan sentiment survey that also came out on Friday. Market participants will be hoping for reassuring headlines out of Islamabad, where negotiations about the conflict will be taking place.
We can hope that headlines about the conflict don’t steal the thunder from the Q1 earnings season, which also takes center stage this week, with more than 60 companies reporting March-quarter results, including 28 S&P 500 members. Banks, brokers, and insurers dominate this week’s reporting docket, but we also have a sprinkling of operators from other sectors reporting results, including Johnson & Johnson, Pepsi, Netflix, J.B. Hunt, and others.
We expect the 2026 Q1 earnings report card to show continued strength and momentum, though market enthusiasm for the March-quarter numbers will likely be tempered by geopolitics-driven macro uncertainty.
Regular readers of our earnings commentary are familiar with the steadily improving earnings outlook we have consistently highlighted over the past year. This improvement in the earnings outlook has been driven mostly by the Tech sector over the past year, with positive Tech sector estimate revisions offsetting negative revisions elsewhere, keeping the aggregate revisions trend in the neutral-to-positive direction.
What has changed over the last couple of quarters is that the positive revisions trend has expanded beyond its aforementioned Tech sector core. We saw this ahead of the start of the last earnings season (2025 Q4), and the trend has strengthened further in the run-up to the start of the 2026 Q1 earnings season.
This context is important to keep in mind as we receive the Q1 earnings reports in the coming days and evaluate how estimates for Q2 and beyond are evolving.
For 2026 Q1, the expectation is that S&P 500 earnings will increase by +13.1% from the same period last year on +9% higher revenues. The chart below shows how Q1 earnings growth expectations have evolved over time.
Image Source: Zacks Investment Research
Estimates have moved higher for 7 of the 16 Zacks sectors since the quarter got underway in January. Q1 estimates have increased for Tech, which has been the consistent trend for more than a year now, but Q1 estimates have also moved higher for the Energy, Basic Materials, Industrials, Construction, Finance, and Business Services sectors.
Rising estimates for the Energy sector are tied to developments in the Middle East, with the sector’s revisions trend shifting from negative in the first two months of the quarter to positive in March. We should note that the revisions trend has remained positive for each of these 6 sectors since the start of the conflict as well.
On the negative side, Q1 estimates have been cut for 9 of the 16 Zacks sectors since the start of the quarter, with the most estimates pressure at the Autos, Medical, Consumer Discretionary, and Utilities sectors.
The Earnings Big Picture
The chart below shows the Q1 earnings and revenue growth expectations in the context of where growth has been in the preceding four quarters and what is expected in the coming three quarters.
Image Source: Zacks Investment Research
The two sets of charts below divide the S&P 500 index into cyclical and non-cyclical sectors, with cyclical sectors accounting for 43.2% of total 2026 Q1 index earnings and non-cyclical sectors accounting for 56.8%.
The cyclical grouping includes the 11 Zacks sectors, out of the 16 in the index, that can broadly be described as ‘cyclical’. These include Consumer Discretionary, Retail, Autos, Basic Materials, Industrials, Construction, Conglomerates, Energy, Finance, Transportation, and Business Services.
Image Source: Zacks Investment Research
The non-cyclical grouping includes Consumer Staples, Medical, Technology, Aerospace, and Utilities.
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture on a calendar-year basis, with double-digit earnings growth expected in 2026 (and the next two years).
Image Source: Zacks Investment Research
2026 Q1 Earnings Season Scorecard
The 2026 Q1 earnings season will take the spotlight with Monday’s Goldman Sachs (GS - Free Report) release, but the reporting cycle has actually gotten underway already, with 20 S&P 500 members reporting results in recent days for their fiscal quarters ending in February. All of these companies with fiscal quarters ending in February, including bellwethers like Nike, Oracle, FedEx, and others, are counted as part of our March-quarter tally.
Total earnings for these 20 index members that have reported results already are up +76.6% from the same period last year on +15.2% higher revenues, with 75% beating EPS estimates and 85% beating revenue estimates.
The comparison charts below put the growth rates for the companies that have reported with what we had seen from this same group of companies in other recent periods.
Image Source: Zacks Investment Research
The comparison charts below put the Q1 EPS and revenue beats percentages for this group of companies relative to what we had seen from them in other recent periods.
Image Source: Zacks Investment Research
Bank Earnings in Focus
The Finance sector will be front and center this week, with Goldman Sachs (GS - Free Report) reporting on Monday, JPMorgan (JPM - Free Report) and other big banks on Tuesday, Morgan Stanley (MS - Free Report) and others on Wednesday, and so on.
Total Q1 earnings for the Zacks Finance sector are expected to +19.9% from the same period last year on +9.2% higher revenues. This would follow the sector’s +17.3% earnings growth on +7.4% higher revenues in the preceding period.
The chart below shows the one-year performance of Goldman Sachs shares relative to Morgan Stanley, JPMorgan, and the S&P 500 index.
Image Source: Zacks Investment Research
As you can see, Goldman Sachs and Morgan Stanley shares have outperformed JPMorgan and the broader market, reflecting expectations of a rebound in investment banking activity and robust trading volumes.
The chart below shows the sector’s 2026 Q1 earnings and revenue growth expectations in the context of what we saw from the group in the last two quarters and expectations for the following four quarters.
Image Source: Zacks Investment Research
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>> What Can Investors Expect from Bank Earnings?