First-quarter earnings season is delivering Wall Street better-than-expected results, propelling US equities' run from one record to the next.
As earnings wind down for two-thirds of the stocks in the S&P 500 Index, the proportion of companies missing analysts' estimates is hovering at the lowest level since 2021. It's not just due to blowout earnings from technology giants, which were expected to lead the charge. S&P 500 companies outside of the tech realm have been posting the sharpest positive earnings surprises since the fourth quarter of 2024, according to Seaport Research Partners.
For Wall Street investors, that's a vote of confidence in Corporate America's profit machine, which keeps humming along despite an oil price shock, tariff turmoil and rising worries about the health of the US consumer.
"As I look at how companies have reported results, I would argue that resilient is almost too modest of a word. There's real, obvious strength," said Marta Norton, chief market strategist at Empower. "The foundation of the economy is proving to be very, very strong."
The strength is showing up across sectors. Small caps are on a tear, bank profits are booming and firms keep plowing past macroeconomic obstacles, though some worries still linger.
Here are five themes that investors are watching play out in this reporting period:
Spending Spree
Microsoft Corp., Amazon.com Inc., Alphabet Inc., Meta Platforms Inc. and Apple Inc. - which make up roughly a quarter of the S&P 500's total market capitalization - were the headliners this week. Their earnings were generally better than expected, though Meta and Microsoft retreated amid concerns around the companies' capital spending plans.
| Meanwhile, the rally in semiconductor stocks extended. Intel Corp. topped the leaderboard, soaring 114% in April, helped by an estimate-shattering sales forecast. Texas Instruments Inc. was also a notable earnings-driven gainer. After soaring nearly 50% during an 18-session winning streak last month the Philadelphia Semiconductor Index, or SOX, closed at an all-time high on Friday. More broadly, earnings for information tech companies in the S&P 500 grew about 50% on a per-share basis, beating the broad index's 30% gain. That's pushing analysts to raise their price targets. Russell RoarsUS economic resilience and earnings growth is finally propelling the market's riskiest stocks after fits and starts of outperformance in recent years. Small-cap stocks are displaying the kind of long-term momentum and fast-paced earnings growth that could set the sector up for prolonged gains, according to Keith Lerner, chief investment officer and chief market strategist at Truist Advisory Services. "We're seeing forward-earnings estimates making fresh highs every week," he said. The Russell 2000 Index is up 13% so far in 2026 - well ahead of the S&P 500's 5.6% gain. Small caps "do most of their business domestically and are therefore benefiting disproportionately from the strong US economic environment," said Mike Dickson, head of research at Horizon Investments. 
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