As of November 7th, the S&P 500 continues its strong earnings trajectory, marking the fourth consecutive quarter of double-digit growth. With 91% of companies having reported results, the year-over-year earnings growth rate for Q3 stands at 13.1%, up from an estimated 7.9% at the start of the quarter.
Source: FactSet, as of 11/10/2026. Returns shown in US dollars on a total return basis.
The benchmark index has delivered solid returns, climbing approximately 16% year-to-date, aided by earnings growth, a resilient US consumer, less restrictive monetary policy, the AI mega theme, and better than expected economic data in the face of US trade uncertainty.
Source: FactSet, as of 11/10/2026. Returns shown in US dollars on a total return basis.
3Q Earnings Beat Wall Street’s Expectations: FactSet reports that 82% of S&P 500 companies beat EPS estimates, well above the 10-year average of 75%. Revenue surprises were also strong, with 77% of firms exceeding expectations. The healthy beat-rate signals confidence across the US economy.
Source: FactSet, as of 11/10/2026. Returns shown in US dollars on a total return basis.
Sector Highlights: Eight of eleven sectors posted earnings growth, led by Information Technology (+21%), followed by Financials and Industrials. Energy (-9%) and Consumer Staples are the only sectors with contracting earnings on the year. Tech’s outperformance reflects continued demand for AI and cloud solutions, while Financials benefited from higher interest income, a healthy credit market, liquid balance sheets, and strong capital markets activity.
Source: FactSet, as of 11/10/2026.
Market Cap Trends: Large-cap companies drove the bulk of earnings gains, but mid-cap names also contributed, and small caps have recovered meaningfully since the summer months.
Source: FactSet, as of 11/10/2026.
A Look at Overseas Earnings: Ex-US markets outperformed domestic equities to date in 2025, and Wall Street is expecting an acceleration of earnings into 2026. Developed markets are on pace to notch double digit growth to close out the year, with similar forecasts for the next twelve months. Emerging markets are expected to eclipse both developed markets and the US, with EPS estimates north of 16% in 2026, driven in part by a resurgent Chinese economy, a weaker dollar, and cheap valuations relative to the S&P.
Source: FactSet, as of 11/10/2026.
Looking Ahead: Analysts are expecting profit momentum to carry into the new year. Potential catalysts include: additional interest rate cuts, growth provisions in the One Big Beautiful Bill Act, a broadening out of the AI theme, reasonable valuation levels outside of large caps and tech, and the possibility of putting trade uncertainty in the rear-view mirror. The benchmark index is on pace for earnings growth of 12% for 2025, and analysts are expecting 14% - 16% growth in 2026, well above long-term averages.
Source: FactSet, as of 11/10/2026.
How Can We Talk to Clients About Corporate Earnings?: Corporate earnings are the foundation of equity valuations; they justify stock prices and valuations. When companies grow their earnings, it’s a sign they’re doing well—selling more, managing costs, or expanding into new markets. That growth tends to support rising stock prices over time.
Strong earnings also reflect a healthy economy; consumers are spending, businesses re-invest in their operations, and money circulates.
Positive returns for client portfolios this year reflect accelerating earnings growth, both at home and abroad, as global markets carry momentum into year-end.
Keep current with Orion’s investment strategy team in the coming weeks, as we wrap up the year for markets and the economy, and look forward to 2026.