Market Outlooks
Q1 Earnings: Tech Carries the Tape
May 31 2026
CHART OF THE WEEK
Q1 Earnings: Tech Leads, Breadth Lags
S&P 500 blended Q1 2026 EPS growth: +27.7%, the strongest growth rate since Q4 2021
What the chart shows
First-quarter earnings season is nearly complete. With 89% of S&P 500 companies reported, blended year-over-year earnings growth stands at 27.7%. That is more than double what analysts expected at the end of March and the strongest growth rate since Q4 2021.
Technology is leading the way. Information Technology earnings grew 50.7%, followed by Communication Services at 48.8% and Consumer Discretionary at 39.7%. Semiconductor demand tied to AI infrastructure remains a major driver. Large companies including Alphabet, Meta and Amazon also contributed significantly. Health Care was the only sector to report negative earnings growth.
What it means for portfolios
The strength is real. The breadth is not.
Record-high index levels are being supported by earnings growth, not simply higher valuations. That is constructive. But much of the growth remains concentrated in a relatively small group of companies.
For portfolios, the takeaway is discipline, not retreat. Rebalance positions that have moved beyond their target weights. Review concentration. And make sure recent winners are still sized for the role they are meant to play.
Source: FactSet. Data reflects blended Q1 2026 year-over-year EPS growth with 89% of S&P 500 companies reported. This material is for informational purposes only. It does not constitute a recommendation to buy or sell any security. Past performance is not indicative of future results. Investments involve risk, including the possible loss of principal.
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Dated material presented here is available for historical and archival purposes only and does not represent the current market environment. Dated material should not be used to make investment decisions or be construed directly or indirectly, as an offer to buy or sell any securities mentioned. Past performance cannot guarantee future results.
