JPMorgan and Goldman Sachs Post Earnings Exceeding Expectations for 2026

Above-Expectations Earnings Forecasts for 2026

Although the earnings season has only just begun, recent analyses by JPMorgan show that approximately 50% of S&P 500 companies' forecasts for 2026 exceed market expectations.

Non-Technology Sectors Continue to Grow

Dubravko Lakos-Bujas, a JPMorgan strategist, stated in a published note, “After the earnings announcements of companies outside the technology sector, a broader-based growth trend is observed this year spreading to other sectors.”

Goldman Sachs' Economic Growth Expectations

Goldman Sachs also predicts that profit increases in 2026 will support economic expansion. The strategist team led by Ben Snider expects strong economic growth in the first half of 2026. Additionally, it is emphasized that this situation will be more favorable for smaller and cyclical stocks in the short term compared to larger market stocks.

Market Developments and Analyses

After three years dominated by technology stocks, other indicators are also supporting this growth. While the market capitalization-weighted S&P 500 Index rose approximately 1%, the equal-weighted index, which reduces the impact of large technology stocks, gained about 4%. Furthermore, according to Bloomberg data, the proportion of stocks trading above their 200-day moving average is near its highest levels in the past year.

Investor Trends and Traditional Economy

Analysts expect the gap between the earnings growth of the technology stocks known as the "Fabulous Seven" and the rest of the S&P 500 to narrow, as investors are turning towards sectors of the traditional economy such as banks, consumer goods companies, and mining companies.

Procter & Gamble and United Airlines

In the case of Procter & Gamble, shares rose by 2.7% after company executives provided signals of a recovery in U.S. sales. United Airlines Holdings also gained value in the market after forecasting a strong year due to rising demand.

The Importance of the Earnings Season

This week, earnings announcements are expected from companies representing about one-third of the market value of the S&P 500, including Microsoft and Boeing.

Long-Term Momentum Threat

However, Goldman Sachs’ Snider noted that the bar is set high for this momentum to continue in the long term. Current forecasts expect an increase of 15% in S&P 500 company earnings in 2026, while this increase is expected to be limited to 10% in the equal-weighted index. He emphasized that economic growth could slow down starting in the second half of 2026, which could limit the duration of the “broad rotation.”