We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
S&P 500 Q4 earnings are seen up 7.9%, marking a 10th straight quarter of growth.
Tech remains the biggest driver, making XLK a top play into Q4 and 2026.
Strong growth in Aerospace and Finance highlights ITA and VFH as earnings winners.
The Q4 earnings season is off to a full-fledged start this week. Big banks like Bank of America, Wells Fargo, Goldman Sachs and Citigroup are expected to come up with earnings results this week. Corporate earnings expectations have strengthened over recent quarters, with estimates trending steadily higher.
S&P 500 Earnings Set for Another Strong Quarter
For Q4 2025, total S&P 500 earnings are projected to rise 7.9% year over year, supported by an 8.2% increase in revenues. If realized, this would mark the 10th consecutive quarter of positive earnings growth for the index, indicating the resilience of corporate profitability, per Earnings Trends issued on Jan. 7, 2026.
Tech: The Key Driver
The Technology sector has been the dominant earnings driver since 2023 and is expected to maintain the contribution in Q4 2025 and beyond. Excluding Tech, overall Q4 earnings growth would slow sharply to 3.8% from 7.9%, highlighting the sector’s outsized impact.
What Awaits in 2026?
Looking ahead, Tech is projected to contribute nearly half of total S&P 500 earnings growth in 2026. All 16 Zacks sectors are expected to record positive earnings growth in 2026, the first time since 2018, with nine sectors expected to achieve double-digit growth, including Aerospace, Autos Basic Materials, Tech, Transportation, and Industrials, per the same Earnings Trends article.
For the Mag 7 group - Microsoft, Alphabet, Meta, Apple, Tesla, Nvidia, and Amazon, total 2026 earnings are expected to increase by 16.5% on 15% higher revenues, which would follow the group’s estimated 2025 earnings growth of 21.7% on 11.9% higher revenues.
Sector ETFs in Focus
Against this backdrop, below we highlight a few sector-based exchange-traded funds (ETFs) that should enjoy the tailwind of rising Q4 estimates and strong year-over-year growth.
For the Aerospace sector, total earnings are up 62.3% from the same period last year on 12.0% higher revenues.President Trump’s proposed $500 billion defense spending push has fueled a broad rally in global aerospace and defense stocks. Worldwide military outlays reached a record $2.7 trillion in 2024 as rising geopolitical tensions continue to drive demand.
While aerospace and defense stock valuations have become richer, solid earnings momentum and an uncertain geopolitical backdrop are tailwinds. The Aerospace sector is also benefiting from high-margin aftermarket services, and repairs as global aircraft fleet ages (read: Defense ETFs in 2026: Trump's Spending Push & Other Key Tailwinds).
Total Tech sectorearnings are expected to grow 15.4% in Q4 on 16.3% higher revenues, which follows earnings growth of 27.3% on 15.5% higher revenues in Q3 of 2025. For the ‘Mag 7’ companies — the core of the tech sector — total Q4 earnings are expected to be up 17.3% on 16.5% higher revenues.This follows the group's +28.3% earnings growth in Q3 on +18.1% higher revenues.
Total finance sectorearnings are expected to grow 11.9% in Q4 on 9.4% higher revenues. Earnings growth is expected to be 17.7%, 11.5% and 1.1% in Q1 of 2026, Q2 of 2026 and Q3 of 2026 on, respectively, 8.2%, 7.2% and 4.3% higher revenues.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Sector ETFs to Play on Solid Q4 Earnings Trends
Key Takeaways
The Q4 earnings season is off to a full-fledged start this week. Big banks like Bank of America, Wells Fargo, Goldman Sachs and Citigroup are expected to come up with earnings results this week. Corporate earnings expectations have strengthened over recent quarters, with estimates trending steadily higher.
S&P 500 Earnings Set for Another Strong Quarter
For Q4 2025, total S&P 500 earnings are projected to rise 7.9% year over year, supported by an 8.2% increase in revenues. If realized, this would mark the 10th consecutive quarter of positive earnings growth for the index, indicating the resilience of corporate profitability, per Earnings Trends issued on Jan. 7, 2026.
Tech: The Key Driver
The Technology sector has been the dominant earnings driver since 2023 and is expected to maintain the contribution in Q4 2025 and beyond. Excluding Tech, overall Q4 earnings growth would slow sharply to 3.8% from 7.9%, highlighting the sector’s outsized impact.
What Awaits in 2026?
Looking ahead, Tech is projected to contribute nearly half of total S&P 500 earnings growth in 2026. All 16 Zacks sectors are expected to record positive earnings growth in 2026, the first time since 2018, with nine sectors expected to achieve double-digit growth, including Aerospace, Autos Basic Materials, Tech, Transportation, and Industrials, per the same Earnings Trends article.
For the Mag 7 group - Microsoft, Alphabet, Meta, Apple, Tesla, Nvidia, and Amazon, total 2026 earnings are expected to increase by 16.5% on 15% higher revenues, which would follow the group’s estimated 2025 earnings growth of 21.7% on 11.9% higher revenues.
Sector ETFs in Focus
Against this backdrop, below we highlight a few sector-based exchange-traded funds (ETFs) that should enjoy the tailwind of rising Q4 estimates and strong year-over-year growth.
Aerospace – iShares U.S. Aerospace & Defense ETF (ITA - Free Report) – Zacks Rank #3 (Hold)
For the Aerospace sector, total earnings are up 62.3% from the same period last year on 12.0% higher revenues.President Trump’s proposed $500 billion defense spending push has fueled a broad rally in global aerospace and defense stocks. Worldwide military outlays reached a record $2.7 trillion in 2024 as rising geopolitical tensions continue to drive demand.
While aerospace and defense stock valuations have become richer, solid earnings momentum and an uncertain geopolitical backdrop are tailwinds. The Aerospace sector is also benefiting from high-margin aftermarket services, and repairs as global aircraft fleet ages (read: Defense ETFs in 2026: Trump's Spending Push & Other Key Tailwinds).
Tech – Technology Select Sector SPDR ETF (XLK - Free Report) – Zacks Rank #1 (Strong Buy)
Total Tech sectorearnings are expected to grow 15.4% in Q4 on 16.3% higher revenues, which follows earnings growth of 27.3% on 15.5% higher revenues in Q3 of 2025. For the ‘Mag 7’ companies — the core of the tech sector — total Q4 earnings are expected to be up 17.3% on 16.5% higher revenues.This follows the group's +28.3% earnings growth in Q3 on +18.1% higher revenues.
Finance – Vanguard Financials ETF (VFH - Free Report) – Zacks Rank #1
Total finance sectorearnings are expected to grow 11.9% in Q4 on 9.4% higher revenues. Earnings growth is expected to be 17.7%, 11.5% and 1.1% in Q1 of 2026, Q2 of 2026 and Q3 of 2026 on, respectively, 8.2%, 7.2% and 4.3% higher revenues.