S&P 500 earnings beat expectations as the Magnificent 7 stumble and small‑cap stocks surge – setting the tone for a pivotal Q4 2025 reporting week.
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The second week of fourth-quarter earnings season begins this week. 31 S&P 500 companies are scheduled to report, with more banks and expanding into other industries. Notable companies scheduled to release earnings include: 3M (MMM), Netflix (NFLX), Johnson & Johnson (JNJ), Procter & Gamble (PG), and Intel (INTC)
Earnings Season At A Glance
According to FactSet, 79% of S&P 500 companies are reporting earnings above the consensus estimates, with 7% of companies having released results.
S&P 500 Earnings Season
Glenview Trust, FactSet, Bloomberg
Earnings Estimates Summary
Companies reporting and combining actual results with consensus estimates for companies yet to report, the S&P 500’s blended earnings growth rate for the quarter is at 8.2% year-over-year, below the 8.3% expectations at the end of the quarter. Notably, the expected earnings growth rate for calendar year 2026 is 14.9%.
Earnings Estimate Summary
Glenview Trust, FactSet
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Market Performance
The S&P 500 declined modestly last week. The Magnificent 7, consisting of Microsoft (MSFT), Meta Platforms (META), Amazon.com (AMZN), Apple (AAPL), NVIDIA (NVDA), Alphabet (GOOGL), and Tesla (TSLA), underperformed. After years of underperformance, small-cap stocks have made a strong showing so far this year.
Market Returns
Glenview Trust, Bloomberg
Magnificent 7
Because technology companies are critical drivers of earnings growth and account for a significant percentage of the S&P 500’s market capitalization, the Magnificent 7 remains the group to watch this earnings season.
The first few companies in the Magnificent 7 are scheduled to report results next week.
Magnificent 7: Q4 Estimated Earnings Growth
Glenview Trust, Bloomberg
Earnings Insights By Sector
Positive earnings surprises from the financial sector were offset by downward revisions in the energy and health care sectors. Despite better earnings from most banks last week, the sector was lower. The financial sector was a strong performer in 2025, but there is legislative risk amid President Trump’s threat to cap credit card interest rates. There are low odds of a cap on credit card rates getting through Congress, but the banks’ relatively full valuations are probably a larger headwind.
Estimated Earnings Growth By Sector
Glenview Trust, FactSet
Revenue Results By Sector
Mixed sales growth results in the financial sector left expected revenue growth unchanged last week and equal to the expectations at the end of the quarter, according to FactSet.
Estimated Sales Growth By Sector
Glenview Trust, FactSet
Dollar Weakness
The US dollar weakened relative to the same quarter in the previous year. On the margin, this should benefit companies’ international earnings. According to FactSet, 42% of S&P 500 sales are from international sources.
Goldman Sachs estimates that a 10% depreciation in the US dollar increases S&P 500 earnings per share by 2-3%. Furthermore, companies tend to have an easier time outperforming consensus sales growth estimates during periods of US dollar weakness. Notably, the technology sector has the highest international sales exposure of all the S&P 500 sectors.
US Dollar Weakness
Glenview Trust, Bloomberg
What To Watch Next Week
Earnings should be the main event during the holiday-shortened trading week. There are some economic releases, but most are still being impacted by the government shutdown.
Despite ongoing softness in the labor market, the better-than-expected retail sales report last week provided more evidence that the US economy remains resilient, lowering the odds of a 2026 recession.
US Recession Odds
Glenview Trust, Bloomberg
Political rumblings, including the Supreme Court’s upcoming ruling on tariffs, credit card rate caps, Iran, and the investigation into Federal Reserve Chair Powell, could impact markets this week. Economic data continues to be impacted by the aftershocks of the government shutdown, which should draw further attention to corporate earnings and guidance as a read-through for the economy.
Disclosure: Glenview Trust may hold stocks mentioned in this article within its recommended investment strategies.