View from the Observation Deck

Today’s post provides an update on 2026 and 2027 earnings and revenue growth rate estimates for the S&P 500 Index (“Index”) and each of its eleven sectors. The Index closed at 7,483 on July 2, 2026, below its all-time high of 7,610, but up a staggering 52.4% (total return) from its most recent low of 4,983 (April 8, 2025). For comparison, between 1928 and 2025 (98 years) the Index posted an average annual total return of 9.8%.

Both calendar year 2026 and 2027 earnings growth rate estimates increased since our last post on this topic.

The Index’s year-over-year (y-o-y) earnings growth rate estimates were observed at 25.0% and 17.4% in 2026 and 2027, respectively, on July 3, 2026, compared to estimates of 22.6% and 14.7% when we last wrote about this topic on May 19, 2026. Seven of the Index’s eleven sectors have 2026 calendar year earnings growth rate estimates above 10%. At 69.8%, Energy has the highest 2026 y-o-y earnings growth rate, followed by Information Technology (56.8%) and Materials (39.9%).

Revenue growth rate estimates remain favorable as well.

The Index’s 2026 estimated y-o-y revenue growth rate totaled 10.4% on July 3, 2026, unchanged from our last post. Each of the Index’s eleven sectors reflects positive y-o-y revenue growth rate estimates in 2026, with three of them estimated to surpass 10.0%. Information Technology commands the highest estimated revenue growth rates at 31.3% and 19.6% in 2026 and 2027, respectively.

Takeaway: Earnings and revenue growth rate estimates continue to reflect rising corporate profitability and efficiency. The Index itself saw estimated 2026 earnings growth rates increase from an already favorable 14.6% on January 2, 2026 to 25.0% on July 3, 2026. Unsurprisingly, increased estimates translated into higher equity prices, pushing the Index to an all-time high of 7,610 on June 2, 2026. Revenue growth rates remain persistently positive as well, with 2026 and 2027 registering estimated increases of 10.4% and 7.6%, respectively. We find calendar year 2026 estimates particularly notable as they reflect difficult comparisons for most sectors (2025 earnings were also quite strong). As revealed in the table, Energy, Information Technology, and Materials stand out among their peers for 2026 earnings growth rate estimates. That said, earnings growth rate estimates exhibit wide dispersion. As noted above, earnings are estimated to increase by at least 10% for seven of the Index’s eleven sectors in 2026. Time will ultimately reveal the accuracy of these estimates, but we maintain that increasing corporate efficiency coupled with higher revenues could be the best catalyst for continued equity price growth.

This chart is for illustrative purposes only and not indicative of any actual investment. There can be no assurance that any of the projections cited will occur. The illustration excludes the effects of taxes and brokerage commissions or other expenses incurred when investing. Investors cannot invest directly in an index. The S&P 500 Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance. The respective S&P 500 Sector Indices are capitalization-weighted and comprised of S&P 500 constituents representing a specific sector.

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