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Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The overall earnings picture remains strong and broad-based. We saw that in the last earnings season, when companies not only comfortably beat consensus estimates but also provided reassuring reads on the economy despite elevated energy costs and other risks. We also saw positive momentum on the revisions front, with estimates for the current and upcoming quarters rising.
Total Q2 earnings for the S&P 500 index are currently expected to be up +22.3% from the same period last year on +11.0% higher revenues, with 11 of the 16 Zacks sectors expected to enjoy positive earnings growth.
Excluding the significant upward revisions to the Energy sector estimates, aggregate Q2 earnings estimates for the remainder of the S&P 500 index would still be in positive territory since the start of April.
Looking at the calendar year picture, total S&P 500 earnings are expected to grow by +21.1% in 2026, with the growth pace dropping to +12.6% when the Tech sector’s contribution is excluded.
Nvidia ((NVDA - Free Report) ) and Micron ((MU - Free Report) ) are material contributors to the Tech sector’s growth profile in 2026 Q2 and the coming quarters. Excluding the contribution from these two semiconductor players, Q2 earnings growth for the rest of the Zacks Tech sector drops to +25% (from +44.8%).
The Role of the Energy Sector in the Aggregate Earnings Picture
The Energy sector has been an obvious beneficiary of the Iran War, with the sector's earnings outlook materially boosted by elevated oil prices. For 2026 Q2, the Energy sector’s earnings are currently expected to more than double from the year-earlier level.
The Energy sector's total dollar earnings for Q2 are only about 10% below the recent quarterly earnings peak in 2022 Q2, when oil prices spiked following Russia’s invasion of Ukraine. For full-year 2026, the Energy sector is expected to earn only about 8% less than it did back in 2022 when it brought in $194.4 billion in aggregate earnings.
With the Iran war moving into the rearview mirror and the Persian Gulf expected to resume its normal traffic, the resulting drop in oil prices will have a direct bearing on the sector’s earnings outlook. In other words, it is reasonable to expect Energy sector estimates to trend down as prices for the underlying commodities settle at lower levels.
We should be mindful however not to overstate the impact of such expected negative Energy sector estimate revisions on the revisions trend at the aggregate or index level.
The reasons for that are two-fold. First, today’s Energy sector simply lacks the heft it once enjoyed in the index, with the sector’s tally in 2026 accounting for only about 6% of total S&P 500 earnings. The Energy sector’s 6% earnings contribution in 2026 compares to 38.7% and 17.3% for the Tech and Finance sectors, respectively. The second reason is that today’s oil companies are a lot more structurally profitable, with far more disciplined capital and operating structures.
The chart below shows the Energy sector’s aggregate quarterly earnings, with estimates for 2026 Q2 and the following three quarters contrasted with actual earnings for the preceding 12 quarters.
Image Source: Zacks Investment Research
The chart below shows the sector’s earnings picture on an annual basis.
Image Source: Zacks Investment Research
Keeping Track of the Revisions Trend
The expected decline in Energy sector estimates that we touched on earlier notwithstanding, the overall revisions trend continues to be positive, with estimates for 2026 Q2 and full-year 2026 increasing. This favorable earnings backdrop is evident in the revisions trend, as seen in how expectations for 2026 Q2 have evolved in recent weeks.
Image Source: Zacks Investment Research
The sectors enjoying positive estimate revisions since the start of April include Energy, Tech, Basic Materials, Utilities, and Business Services. Aggregate Q2 earnings estimates would still be positive since the start of the period, even without favorable revisions for the Energy sector, but aggregate estimates would be down if we exclude the increases in the Energy and Tech sector estimates.
The Tech sector has been enjoying positive estimate revisions for more than a year now, so the sector’s ongoing positive revisions trend is basically more of the same. We have discussed in this space the positive revisions that the Mag 7 group has been experiencing.
On the negative side, Q2 estimates have come under renewed pressure since the start of the period for the Transportation, Autos, Medical, and Consumer Discretionary sectors.
The chart below shows S&P 500 expectations for 2026 Q2 in terms of what was achieved in the preceding four periods and what is currently expected for the following three quarters.
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture for the S&P 500 index on an annual basis.
Image Source: Zacks Investment Research
As with estimates for Q2, estimates for full-year 2026 have also been steadily going up, particularly since the start of March. The chart below shows the evolution of aggregate S&P 500 earnings estimates since last July.
Image Source: Zacks Investment Research
Full-year 2026 earnings estimates have increased for 11 of the 16 Zacks sectors since the start of March, with the most pronounced gains at the Energy, Basic Materials, Tech, Industrials, Utilities, and Business Services sectors. On the negative side, estimates have been under pressure for the Transportation, Autos, Medical, and Consumer Discretionary sectors since the start of March.
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Image: Bigstock
Making Sense of the Evolving Earnings Picture
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The Role of the Energy Sector in the Aggregate Earnings Picture
The Energy sector has been an obvious beneficiary of the Iran War, with the sector's earnings outlook materially boosted by elevated oil prices. For 2026 Q2, the Energy sector’s earnings are currently expected to more than double from the year-earlier level.
The Energy sector's total dollar earnings for Q2 are only about 10% below the recent quarterly earnings peak in 2022 Q2, when oil prices spiked following Russia’s invasion of Ukraine. For full-year 2026, the Energy sector is expected to earn only about 8% less than it did back in 2022 when it brought in $194.4 billion in aggregate earnings.
With the Iran war moving into the rearview mirror and the Persian Gulf expected to resume its normal traffic, the resulting drop in oil prices will have a direct bearing on the sector’s earnings outlook. In other words, it is reasonable to expect Energy sector estimates to trend down as prices for the underlying commodities settle at lower levels.
We should be mindful however not to overstate the impact of such expected negative Energy sector estimate revisions on the revisions trend at the aggregate or index level.
The reasons for that are two-fold. First, today’s Energy sector simply lacks the heft it once enjoyed in the index, with the sector’s tally in 2026 accounting for only about 6% of total S&P 500 earnings. The Energy sector’s 6% earnings contribution in 2026 compares to 38.7% and 17.3% for the Tech and Finance sectors, respectively. The second reason is that today’s oil companies are a lot more structurally profitable, with far more disciplined capital and operating structures.
The chart below shows the Energy sector’s aggregate quarterly earnings, with estimates for 2026 Q2 and the following three quarters contrasted with actual earnings for the preceding 12 quarters.
Image Source: Zacks Investment Research
The chart below shows the sector’s earnings picture on an annual basis.
Image Source: Zacks Investment Research
Keeping Track of the Revisions Trend
The expected decline in Energy sector estimates that we touched on earlier notwithstanding, the overall revisions trend continues to be positive, with estimates for 2026 Q2 and full-year 2026 increasing. This favorable earnings backdrop is evident in the revisions trend, as seen in how expectations for 2026 Q2 have evolved in recent weeks.
Image Source: Zacks Investment Research
The sectors enjoying positive estimate revisions since the start of April include Energy, Tech, Basic Materials, Utilities, and Business Services. Aggregate Q2 earnings estimates would still be positive since the start of the period, even without favorable revisions for the Energy sector, but aggregate estimates would be down if we exclude the increases in the Energy and Tech sector estimates.
The Tech sector has been enjoying positive estimate revisions for more than a year now, so the sector’s ongoing positive revisions trend is basically more of the same. We have discussed in this space the positive revisions that the Mag 7 group has been experiencing.
On the negative side, Q2 estimates have come under renewed pressure since the start of the period for the Transportation, Autos, Medical, and Consumer Discretionary sectors.
The chart below shows S&P 500 expectations for 2026 Q2 in terms of what was achieved in the preceding four periods and what is currently expected for the following three quarters.
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture for the S&P 500 index on an annual basis.
Image Source: Zacks Investment Research
As with estimates for Q2, estimates for full-year 2026 have also been steadily going up, particularly since the start of March. The chart below shows the evolution of aggregate S&P 500 earnings estimates since last July.
Image Source: Zacks Investment Research
Full-year 2026 earnings estimates have increased for 11 of the 16 Zacks sectors since the start of March, with the most pronounced gains at the Energy, Basic Materials, Tech, Industrials, Utilities, and Business Services sectors. On the negative side, estimates have been under pressure for the Transportation, Autos, Medical, and Consumer Discretionary sectors since the start of March.