The June-quarter reporting cycle kicks off in earnest the week of 13 July, with the big four US banks — JPMorgan, Bank of America, Citigroup and Wells Fargo — reporting across 14–15 July (AEST overnight sessions for us). Big Tech follows in late July, with Nvidia not due until late August. Here’s what the market is pricing in, and where the pressure points sit.
The headline numbers
Expectations are unusually high. FactSet has consensus S&P 500 earnings growth at around 23.3% year-over-year, which would make it the second consecutive quarter above 20%. Revenue growth is pegged near 11–12% — the fastest top-line growth in several years. For context, the 5-year average earnings growth rate is about 16% and the 10-year average closer to 10%.
What makes this quarter genuinely unusual is the direction of revisions. Analysts normally trim estimates as a quarter progresses — the 10-year average is a cut of around 2.7% during the quarter. This time, estimates rose roughly 3.4% between the end of March and the end of June. Guidance tells the same story: of the 111 S&P 500 companies that issued Q2 EPS guidance, 63 were positive — a 57% positive rate against a long-run average of around 41%.
Deutsche Bank notes this is the highest consensus growth forecast heading into any earnings season outside of post-recession recoveries — and they think companies will still beat it, forecasting closer to 29%.
Where the growth is coming from
The growth is narrow. Two sectors — Energy and Information Technology — account for most of the upward revisions:
Energy is expected to post triple-digit earnings growth (Zacks has it around +114%), driven largely by elevated oil prices through the quarter following the Iran conflict.
Tech is forecast to grow in the mid-40s percent range, with semiconductors doing the heavy lifting — Deutsche Bank projects semi earnings up ~148% year-over-year, contributing roughly 11 percentage points of the entire index’s growth on their own. The Magnificent 7 as a group is expected to grow earnings around 28%.
Strip out Tech and index growth falls to roughly +12%. Strip out both Tech and Energy revisions, and aggregate estimates would actually have fallen during the quarter. Sectors under estimate pressure include Transportation, Autos, Medical/Healthcare, Consumer Discretionary and Consumer Staples.
The banks set the tone
Financials are the second-largest earnings contributor to the index behind Tech, so the opening week matters. The sector is expected to deliver EPS growth in the low double digits. The bull case: accelerating loan growth, resilient credit, strong trading revenue, and a sector trading around 12x earnings versus 22x for the broader index. The bear case: a flatter yield curve squeezing net interest margins, sluggish M&A, and lingering questions around private credit exposure. JPMorgan and Bank of America have each beaten EPS estimates eight quarters running, so the market will expect more of the same.
The five things markets are actually watching
1. AI capex vs AI revenue. Alphabet, Microsoft, Meta and Amazon have poured over US$220 billion into AI infrastructure over the past four quarters. The question this season isn’t whether they’ll spend — it’s whether the spend is converting to revenue rather than just depreciation. Any sign the payoff is slipping could hit the sector hard, and Ed Yardeni has flagged exactly this as the key correction risk.
2. Tariff pass-through. Companies like Procter & Gamble have already announced price rises to offset tariff costs. The market wants to know whether multinationals can pass costs through without killing demand — with tariff deadlines landing mid-season, commentary here could move markets independently of the numbers.
3. The consumer. After a weak June jobs report (+57k payrolls), consumer-facing names — Home Depot, McDonald’s, Walmart, the travel platforms — become the best real-time read on household resilience.
4. Second-half guidance. Consensus assumes earnings growth accelerates through H2 2026. With the index at roughly 20–22x forward earnings — well above the 10-year average near 19 — and having printed a couple of dozen all-time highs this year, there’s little valuation cushion. Beats on the quarter with soft guidance is the classic setup for sell-the-news reactions.
5. Rates and the macro backdrop. May CPI came in hot at 4.2%. If rate expectations back up during the season, even strong beats can get faded as the discount rate does the damage.
What it means for traders
The setup is asymmetric. Expectations have been revised up into the print, positioning is stretched, and valuations assume sustained beats. Historically, companies beat consensus by 3–5% on average, so a “good” season is already largely priced. That means:
- Index-level reactions may be muted on beats but sharp on misses — particularly any guidance disappointment from mega-cap tech.
- Sector dispersion should be high. Energy and semis carry the growth; consumer and healthcare carry the risk. Expect divergent moves and elevated single-name volatility around report dates.
- Overnight gap risk is elevated for index CFD traders through late July, especially around the Big Tech reporting cluster. Bank reports land in the US morning; most tech reports land after the US close — both hit our AEST session.
The bar is high. The market isn’t asking whether corporate America grew in Q2 — it’s asking whether growth can keep accelerating into 2027 at these valuations. That’s what guidance season will answer.
Sources: FactSet Earnings Insight, Zacks, Deutsche Bank via Proactive Investors, IG. Data as at 11 July 2026.