Earnings expectations set a higher bar in 1Q26

With 1Q26 earnings season underway, one familiar dynamic looks notably weaker than usual. Historically, S&P 500^® earnings estimates tend to drift lower ahead of reporting season before snapping higher as companies clear a reduced bar. This quarter, that reset never materialized, leaving less room for upside surprises as results come in. “But the issue with this year – with estimates remaining firm, maybe the bar is now higher for companies to ‘beat,’” says Jack Janasiewicz, CFA, Multi-Asset Portfolio Manager and Lead Portfolio Strategist at Natixis Investment Managers Solutions.

S&P 500^® Q1 Earnings Evolution (2011–2026)

The S&P 500^® is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and covers approximately 80% of available market capitalization.

• S&P 500^® earnings are expected to grow 12.6% in 1Q26, marking a sixth consecutive quarter of double-digit growth.

• Estimates did not see the typical pre-earnings decline, reducing the cushion that often supports upside surprises.

• With expectations already elevated, market reaction is likely to hinge more on guidance and outlook than headline results.