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

Global Momentum in Manufacturing

April PMIs (Purchasing Managers’ Indices) point to a meaningful improvement in global manufacturing momentum, with the U.S., Eurozone and Japan all posting stronger-than-expected and firmly expansionary results. The breadth of the rebound suggests improving global demand, supporting a constructive outlook for growth despite ongoing geopolitical tensions.

Chart of the week | Macroeconomic

Tracking the margin uptrend

Rising margin expectations continue to support equities, underscoring the resilience of corporate profitability in the face of last year’s tariffs and this year’s Middle East war. The U.S. remains especially strong compared to peers, though first quarter earnings will be an important test.

Chart of the week | Macroeconomic

Time to buy tech?

Technology valuations have meaningfully declined over the past year, but the sector continues to stand out for its strong earnings growth and relative resilience. While near-term uncertainty remains, tech still appears well positioned as a key driver of broader market growth.

Chart of the week | Macroeconomic

Job market hanging in there

Recent jobless claims data point to a resilient U.S. labor market, with both initial and continuing claims remaining low and signaling that unemployment is still contained. Although job growth has softened and remains subdued, March’s job growth of 178,000, the highest since 2024, is encouraging. Our constructive outlook still holds despite continued uncertainty related to the war in the Middle East.