Earnings scorecard

📊 3Q26 earnings: strong headline, concentrated engine

The S&P 500 is on track for 31.9% year-over-year earnings growth in Q3, the third straight quarter above 25%, with 91% of companies reported. Revenue is up 14.4%.

What stands out:

🔹 Energy leads by a wide margin. Earnings are up about 151%, helped by oil averaging ~$86, 32% above a year ago.

🔹 Tech is the AI/semiconductor story. Sector earnings are up 69%, but excluding semiconductors, growth would be about 30%.

🔹 Breadth is thinner than the headline. Seven of eleven sectors posted double-digit growth, while Financials and Utilities grew in the single digits.

🔹 Beats were frequent but small. 84% of companies beat EPS estimates, but the aggregate surprise is only +3.1%, the lowest since Q4 2022. Communication Services, hit by large Meta and Alphabet charges, is the drag.

Looking ahead: analysts expect 28.3% growth in Q4, and the forward P/E of 18.3 sits below its 5-year average of 19.8.

The takeaway: earnings are doing the heavy lifting, but a few sectors and a handful of names are driving them. Diversification still matters.

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