Chart of the Week

Earnings breadth still improving

May 5, 2026

Time to Read: 3 mins

Rising earnings estimates continue to support equities despite geopolitical and macroeconomic uncertainty. With profit growth broadening across S&P 500 industries, resilient corporate earnings underpin our constructive outlook for the stock market.

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Expectations for future earnings growth remain a key driver of equity market performance. That dynamic is especially visible today: rising earnings estimates have supported equities despite persistent concerns over the war in the Middle East and its potential effects on energy prices, inflation and global growth. Consensus forecasts now call for S&P 500 earnings to grow 20.6% in 2026, up from 14.3% before the conflict began — a meaningful upward revision that highlights companies’ profit resilience.

Earnings strength is becoming broader, with more industries expected to post stronger results. Notably, 88% of S&P 500 companies now have earnings estimates higher than their levels 12 months ago — the highest share in three years. That widening earnings breadth supports a more durable market backdrop.

In fact, earnings and interest rates are the main drivers of equity returns. With interest rates on hold, it’s corporate profitability across a wide range of industries that continues to support our constructive outlook for equities.

Chart of the Week | Macroeconomic

Muni yields are attractive

The war in Iran has increased volatility across fixed income markets, pushing municipal bond yields higher as investors reassess inflation risk, energy costs and the path of Federal Reserve policy. Even so, historically elevated municipal bond yields present a compelling opportunity for tax-sensitive investors.

Chart of the Week | Macroeconomic

Sizing up small caps

Small caps have outperformed this year despite the threat of higher interest rates, suggesting the rally is being driven by more than just diversification away from large cap tech stocks. Improving earnings expectations and a resilient U.S. economy support our view that small caps have further upside from here.

Chart of the Week | Macroeconomic

Signs from Sales

Year-to-date stock market returns have been driven by robust earnings growth. But when assessing the equity outlook, it’s important to ask what’s supporting the strong earnings trend.

Chart of the Week | Macroeconomic

Resilience is a historical trend

The S&P 500’s history shows that despite recessions, wars, inflation, and corrections, the market’s long-term trajectory has remained upward. As the U.S. marks 250 years of resilience, the lesson for investors is clear: wealth is built through patience, discipline and staying invested.