S&P 500 Earnings Growth Broadens to 14 Sectors

S&P 500 earnings are projected to rise 24.0% year-over-year this quarter, driven by an 11.3% increase in revenues. According to data from GN markets/earnings (en-US), this marks the most broad-based growth period in recent history. Fourteen of the 16 major sectors are expected to post positive earnings growth, with six sectors achieving double-digit increases. This performance ensures that the index will record its eighth consecutive quarter of double-digit earnings growth.

The positive trend in earnings revisions has persisted for a year, with estimates moving higher for half of the sectors since the start of the current quarter. The Energy sector has seen the most significant upgrades, reflecting higher oil prices linked to regional geopolitical tensions. Other sectors with improving outlooks include Aerospace, Industrial Products, Technology, Autos, Transportation, Finance, and Utilities. Notably, the aggregate revisions trend remains positive even if the upgrades in Energy or Technology are excluded from the calculation.

Technology Sector Drives Aggregate Growth

The Technology sector remains a primary driver of overall index performance. Excluding the Tech sector, Q3 earnings growth for the rest of the S&P 500 drops to 14.5%. Within the Technology sector, two companies, Micron and Nvidia, are material contributors to the growth figure. If these two firms are removed from the calculation, the remaining Technology sector earnings growth is expected to be 23.7%, compared to 42.0% when they are included. This concentration highlights the significant weight of semiconductor demand in the current earnings cycle.

Conglomerates Face Sole Sector Decline

Despite the broad-based improvement, the Conglomerates sector is the only group expected to see lower earnings relative to the previous year. Estimates for this sector indicate a 35.4% decline in Q3 earnings. This contraction stands in contrast to the positive growth seen in the other 15 sectors. The divergence underscores that while the aggregate market is expanding, specific diversified business models are facing headwinds that result in negative year-over-year performance.

Revisions Sustain Favorable Outlook

The consistency of positive revisions supports the current earnings forecast. Since the beginning of the quarter, analysts have adjusted their estimates upward for a majority of the tracked sectors. This trend is not dependent on a single outlier but is distributed across multiple industries, including utilities and finance. The stability of these revisions suggests that the 24.0% growth projection for the S&P 500 is grounded in sustained business improvements rather than temporary spikes.