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2026 outlook strong with 16.3% growth; Energy, Tech see biggest estimate upgrades.
The Q1 earnings season is shaping up with solid momentum, as companies not only beat consensus estimates but also signal resilience in the economy despite elevated energy costs and geopolitical risks, per the Earnings Trends issued on April 22, 2026. Strength has been particularly notable on the revenue side, both in growth rates and beat percentages.
Early Results Show Robust Growth and Beats
For the 86 S&P 500 companies that have reported so far, total earnings are up 26.1% year over year on 10.3% higher revenues. About 76.7% have beaten EPS as well as revenue estimates. While earnings and revenue growth, along with revenue beats, are above historical norms, EPS beat percentages are slightly below the five-year average.
Finance Sector Delivers Solid Performance
The Finance sector has reported results from 52.6% of its market capitalization within the index. Earnings for these companies are up 24.7% on 12.4% higher revenues. About 76.7% beat EPS estimates, while 63.3% surpassed revenue expectations. Overall, the finance sector results compare favorably with recent quarters.
Tech Continues to Drive Growth
The Tech sector remains a key growth engine, with earnings expected to rise 27.7% in Q1. Excluding Tech, overall earnings growth for the index would drop significantly to 6.7%, highlighting its outsized contribution.
‘Magnificent 7’ Maintain Leadership
The ‘Magnificent 7’ group is expected to deliver earnings growth of 20.3% on 21.8% higher revenues. Without this group, overall index earnings growth would moderate to 11.6% versus the reported 13.7%.
Q1 Outlook Remains Healthy
Combining reported results with estimates for remaining companies, total S&P 500 earnings are expected to rise 13.7% on 9.4% revenue growth. This follows 14.0% earnings increase on 9.1% revenue growth in Q4 2025, indicating continued expansion.
Looking ahead, Q2 earnings are projected to grow 19.8% year over year on 9.2% higher revenues, up from 17.1% projected growth at the end of March.
Positive Full-Year 2026 Outlook
For full-year 2026, S&P 500 earnings are expected to grow 16.3%. Excluding Tech, growth moderates to 10.5%. All 16 Zacks sectors are projected to post earnings gains, with six sectors expected to deliver double-digit growth.
Broad-Based Sector Strength
A total of 10 Zacks sectors are projected to post positive earnings growth in Q1. Investors can bet on the following sectors and their related ETFs.
Tech (+27.7% expected earnings growth in Q1) – The underlying Technology Select Sector Index includes companies from the following industries: computers & peripherals; software; diversified telecommunication services; communications equipment; semiconductor & semiconductor equipment; internet software & services; IT services; wireless telecommunication services; electronic equipment & instruments; and office electronics. State Street Technology Select Sector SPDR ETF (XLK - Free Report) has a Zacks Rank #1 (Strong Buy).
Finance (+27.3% expected growth) – The underlying Financial Select Sector Index seeks to provide an effective representation of the financial sector of the S&P 500 Index. State Street Financial Select Sector SPDR ETF (XLF - Free Report) has a Zacks Rank #1.
Basic Materials (+17.7% expected growth) – The underlying Materials Select Sector Index seeks to provide an effective representation of the materials sector of the S&P 500 Index. State Street Materials Select Sector SPDR ETF (XLB - Free Report) has a Zacks Rank #2.
Aerospace (+10.0% expected growth) – The underlying Dow Jones U.S. Select Aerospace & Defense Index measures the performance of the aerospace and defense sector of the U.S. equity market. iShares U.S. Aerospace & Defense ETF (ITA - Free Report) has a Zacks Rank #2.
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Forget Geopolitics: Bet on Earnings Growth & Invest in These Sector ETFs
Key Takeaways
The Q1 earnings season is shaping up with solid momentum, as companies not only beat consensus estimates but also signal resilience in the economy despite elevated energy costs and geopolitical risks, per the Earnings Trends issued on April 22, 2026. Strength has been particularly notable on the revenue side, both in growth rates and beat percentages.
Early Results Show Robust Growth and Beats
For the 86 S&P 500 companies that have reported so far, total earnings are up 26.1% year over year on 10.3% higher revenues. About 76.7% have beaten EPS as well as revenue estimates. While earnings and revenue growth, along with revenue beats, are above historical norms, EPS beat percentages are slightly below the five-year average.
Finance Sector Delivers Solid Performance
The Finance sector has reported results from 52.6% of its market capitalization within the index. Earnings for these companies are up 24.7% on 12.4% higher revenues. About 76.7% beat EPS estimates, while 63.3% surpassed revenue expectations. Overall, the finance sector results compare favorably with recent quarters.
Tech Continues to Drive Growth
The Tech sector remains a key growth engine, with earnings expected to rise 27.7% in Q1. Excluding Tech, overall earnings growth for the index would drop significantly to 6.7%, highlighting its outsized contribution.
‘Magnificent 7’ Maintain Leadership
The ‘Magnificent 7’ group is expected to deliver earnings growth of 20.3% on 21.8% higher revenues. Without this group, overall index earnings growth would moderate to 11.6% versus the reported 13.7%.
Q1 Outlook Remains Healthy
Combining reported results with estimates for remaining companies, total S&P 500 earnings are expected to rise 13.7% on 9.4% revenue growth. This follows 14.0% earnings increase on 9.1% revenue growth in Q4 2025, indicating continued expansion.
Looking ahead, Q2 earnings are projected to grow 19.8% year over year on 9.2% higher revenues, up from 17.1% projected growth at the end of March.
Positive Full-Year 2026 Outlook
For full-year 2026, S&P 500 earnings are expected to grow 16.3%. Excluding Tech, growth moderates to 10.5%. All 16 Zacks sectors are projected to post earnings gains, with six sectors expected to deliver double-digit growth.
Broad-Based Sector Strength
A total of 10 Zacks sectors are projected to post positive earnings growth in Q1. Investors can bet on the following sectors and their related ETFs.
Tech (+27.7% expected earnings growth in Q1) – The underlying Technology Select Sector Index includes companies from the following industries: computers & peripherals; software; diversified telecommunication services; communications equipment; semiconductor & semiconductor equipment; internet software & services; IT services; wireless telecommunication services; electronic equipment & instruments; and office electronics. State Street Technology Select Sector SPDR ETF (XLK - Free Report) has a Zacks Rank #1 (Strong Buy).
Finance (+27.3% expected growth) – The underlying Financial Select Sector Index seeks to provide an effective representation of the financial sector of the S&P 500 Index. State Street Financial Select Sector SPDR ETF (XLF - Free Report) has a Zacks Rank #1.
Basic Materials (+17.7% expected growth) – The underlying Materials Select Sector Index seeks to provide an effective representation of the materials sector of the S&P 500 Index. State Street Materials Select Sector SPDR ETF (XLB - Free Report) has a Zacks Rank #2.
Aerospace (+10.0% expected growth) – The underlying Dow Jones U.S. Select Aerospace & Defense Index measures the performance of the aerospace and defense sector of the U.S. equity market. iShares U.S. Aerospace & Defense ETF (ITA - Free Report) has a Zacks Rank #2.