The strongest earnings season of the S&P 500 in four years? Nearly 70% of the companies that have reported have exceeded revenue expectations.

In the current financial reporting season, the S&P 500 index is expected to have the highest number of companies exceeding revenue expectations in about four years, with U.S. companies appearing to calmly handle the impacts of tariffs. According to financial report tracking data, as of now, nearly 70% of the companies that have reported earnings in the index's components have exceeded revenue estimates for the third quarter. This is the highest level of exceeding expectations since the resurgence after the COVID-19 pandemic in the last three months of 2021. U.S. companies have exceeded revenue expectations at a rate of 69%, the highest in four years U.S. companies have seemingly not been affected by tariffs and have maintained profits through a combination of price increases and cost reductions. At the same time, the magnitude of revenue exceeding expectations is also approaching the highest level since the post-pandemic boom: according to strategists at Deutsche Bank, total revenue for companies is 2.4% higher than expected, compared to a historical average of 0.5%. Deutsche Bank strategists Bankim Chadha and Parag Thatte wrote in a report: "Historically, revenue exceeding expectations is closely related to unexpected increases in inflation, and this time it may partly reflect the influence of tariffs on pricing." Furthermore, given the strong readings of the U.S. economy and job market, as well as the expected further interest rate cuts by the Federal Reserve, the profit outlook for 2026 is becoming increasingly bright. A team led by Morgan Stanley strategist Michael Wilson wrote, "The earnings season has just begun, but this could be an initial sign that revenue growth will continue into next year, which aligns with our view." They believe that the proportion of revenue exceeding expectations being twice the historical norm is a "highlight" of this financial reporting season. Most Wall Street strategists believe that the strongest earnings and sales growth is still concentrated in mega-cap stocks and tech stocks. But with favorable year-over-year base effects driving other industries to achieve satisfactory profit growth, financial, real estate, materials, and utility stocks are currently seeing double-digit profit increases, according to Deutsche Bank strategists. Nevertheless, the widespread outperformance in earnings has not kept everyone optimistic. Lori Calvasina, capital markets strategist at RBC Capital Markets in Canada, believes that the current positive trend may be difficult to sustain. Calvasina said, "We believe earnings have laid a solid foundation for the U.S. stock market, but it is difficult to replicate the surge in bullish earnings sentiment that drove the market upwards in the previous reporting period." There is still a long way to go in this financial reporting season, as companies accounting for 50% of the S&P 500 index's market value will report earnings this week, including large-scale AI companies like Microsoft, Alphabet, and Meta Platform. Nevertheless, the strong start has kept market sentiment optimistic, especially with encouraging news about trade negotiations, strong earnings from banks and financial companies, and most companies raising their expectations. Morgan Stanley strategist Dubravko Lakos-Bujas pointed out that based on a constant index composition, about 66% of companies have achieved "double exceeding expectations" in revenue and net profit, compared to only 51% in the past four quarters. They also noted that earnings per share expectations for 2026 have been raised by 0.3% to $305.03, a 14.1% year-over-year increase. According to Lakos-Bujas and colleagues, this "implies that growth will accelerate above trend levels next year."