Chart is for illustrative purposes only. Past performance is not necessarily an indication of future results. See full index definitions in glossary.
This year has been notable for the strength of global earnings growth. In the U.S., S&P 500 earnings are expected to rise 31.5% in 2026, up sharply from 13% in 2025. The story does not end there. Earnings growth has improved meaningfully across Europe, Japan and other major markets, with each region expected to deliver profit growth well above last year’s pace.
Though global earnings momentum is likely to slow in 2027 from this year’s unusually strong levels, growth may still remain above historical averages. That should matter for markets, especially as the earnings story has broadened beyond a narrow group of U.S. stocks. Corporate margins continue to rise, and while artificial intelligence-related capital spending has been a major driver of growth, the broader market remains fundamentally solid.
We do expect volatility to increase as markets contend with a range of uncertainties, including higher U.S. Treasury yields, the approaching midterm elections and ongoing geopolitical tensions. Still, we view the combination of above-average earnings growth and broad-based global participation as a clear positive for the forward outlook for global equities. After all, we believe that earnings growth remains the key driver of long-term market returns. We therefore remain constructive.
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The S&P 500 Index: The S&P 500 Index is a stock‐market index that tracks the performance of 500 of the largest publicly traded U.S. companies, weighted by their market capitalization, and is widely used as a benchmark for the overall U.S. equity market. The MSCI ACWI ex USA Index: The MSCI ACWI ex USA Index measures the performance of large- and mid-cap stocks across developed markets, excluding the U.S., and emerging markets. The index covers approximately 85% of the investable equity market outside the U.S. The S&P SmallCap 600 Index: The S&P SmallCap 600 Index measures the performance of the small-cap segment of the U.S. equity market. It includes companies that meet specified liquidity and financial viability requirements. The STOXX Europe 600 Index: The STOXX Europe 600 Index measures the performance of 600 large, mid- and small-cap companies across developed European markets. The MSCI Japan Index: The MSCI Japan Index measures the performance of large- and mid-cap segments of the Japanese equity market and covers approximately 85% of Japan’s free float-adjusted market capitalization. Investors cannot invest directly into an index.
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MARK-998620-2026-09-09