85% of S&P 500 companies have reported earnings that exceeded expectations, making this Wall Street’s strongest earnings season in four years.

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According to statistics from the media on Wednesday, S&P 500 component stocks are delivering their strongest earnings season performance in four years. Among the companies that have reported third-quarter results so far, about 85% have exceeded profit expectations, marking the highest proportion since 2021. This performance has provided fresh support for US stocks, which have risen 15% this year but stalled in October.

This proportion of earnings beats is particularly eye-catching, as analysts had already raised the bar for profit forecasts ahead of earnings season. Strong corporate performance and sustained investment in the field of artificial intelligence are offsetting the threats from trade tensions and the risk of a government shutdown.

With the US government shutdown causing an economic data vacuum, better-than-expected earnings have become a potential source of market confidence. Marija Veitmane, head of equity research at State Street Global Markets, said that although it is too early to draw conclusions, large companies are optimistic about coping with current regulatory uncertainties and are confident about future investment and capital expenditures.

JPMorgan predicts that S&P 500 component stocks will achieve double-digit earnings growth of about 12%, higher than the market’s general expectation of a 7.7% year-on-year increase.

Earnings Surprises from Multiple Sectors

Currently, fewer than one fifth by market value of S&P 500 companies have released earnings announcements, but disclosed data shows that US corporate profits remain strong in the face of tariffs and economic uncertainty. According to data compiled by Bloomberg Industry Research, companies that beat earnings expectations come from multiple sectors.

In the financial sector, both Citigroup and Morgan Stanley exceeded expectations; General Motors, benefiting from strong truck sales and some tariff relief, saw its stock price soar after raising its earnings guidance; Coca-Cola also beat expectations, as consumers continued to buy its beverages in large quantities despite price increases.

The team led by JPMorgan strategist Dubravko Lakos-Bujas stated in a report:

Under the strong wave of AI investment, continued deficit spending, and resilient consumer support, US companies will continue to deliver excellent earnings growth.

Despite strong performance, Morgan Stanley strategist Michael Wilson said earlier this week that US stocks still face unresolved risks such as trade tensions and a slowdown in earnings forecast upgrades, and investors should remain cautious in the short term.

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