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Earnings Season Starts Next Week and Wall Street Expects Profits to Jump 29.5%. Is That Enough?
- Analysts expect S&P 500 profits to rise 29.5% from a year ago in the third quarter of 2026, according to FactSet. Sales are expected to rise 12.3%.
- It would be the third quarter in a row above 25% growth and the eighth in a row of double-digit growth.
- All 11 sectors are expected to grow. Energy, technology, communication services and materials lead.
- 72 of 116 companies that gave guidance raised expectations. The five-year average is 42.
- Big banks report on October 13 and 14. PepsiCo and Delta went first this week, and both cut their full-year profit forecasts.
What is earnings season?
Four times a year, public companies report how much money they made in the last three months. Most of them do it within the same few weeks. That stretch is called earnings season.
The season for July through September starts now. The largest US banks report on Tuesday, October 13 and Wednesday, October 14. Hundreds of companies follow through early November.
The numbers Wall Street expects
FactSet tracks what analysts predict for every company in the S&P 500. Its latest count, dated October 2:
| Measure | Expected for Q3 2026 |
|---|---|
| Profit growth from a year ago | 29.5% |
| Sales growth from a year ago | 12.3% |
| Sectors expected to grow | 11 of 11 |
| Expected profit growth, Q4 2026 | 27.6% |
| Expected profit growth, full year 2026 | 32.4% |
If the 29.5% holds, it will be the third quarter in a row with growth above 25%.
An unusual sign: forecasts went up
Analysts normally lower their estimates as a quarter goes on. Over the past five years the average cut was 2.2%.
This time they raised them by 1.4%. Companies were upbeat too. Of the 116 that gave guidance, 72 said results would beat what analysts expected. A typical quarter has 42.
So why isn't this a sure thing?
Because everyone already knows. The S&P 500 set a record high this week before slipping to about 7,765. A lot of good news is in the price.
The first two reports of the season show the risk:
- PepsiCo beat estimates on October 8, then cut its profit forecast for the year. See what PepsiCo said.
- Delta missed estimates on October 9 for the first time in two years and cut its forecast because of fuel costs. See Delta's quarter.
Both blamed higher costs. The headline growth number is strong, but it is being carried by a few sectors. Energy is booming because oil is expensive. Technology is booming because of AI spending. Companies that buy fuel and ingredients are being squeezed.
Three things to watch
- Guidance, not last quarter. What a company says about the next few months moves the stock more than the results.
- Costs. Oil above $100 and 10-year Treasury yields above 5% raise expenses for almost everyone.
- AI spending. A report this week that OpenAI's revenue is lower than believed knocked chip stocks down. Big tech results later in October will show whether the spending continues.
Is the market expensive?
Less than you might think. The S&P 500 trades at 19.0 times expected profits. That is slightly below its five-year average of 19.8 and matches the ten-year average of 19.1. Prices are high because profits are high.
What it means for you
If you own index funds: you don't need to do anything. Earnings season makes headlines, but your fund owns all 500 companies. The winners and losers mostly offset each other.
If you own individual stocks: find the date your companies report. Read the guidance section first. Our guide to reading an earnings report shows what to look for.
If you're tempted to trade around earnings: a stock can jump or drop 10% overnight on a report, and the direction is close to a coin flip. That's a hard game to win.
Key dates
- October 13 and 14: big banks. See what to watch.
- October 21: Tesla.
- October 28: the Federal Reserve's rate decision lands in the middle of the season.
- Late October: the largest technology companies.
Frequently asked questions
When does Q3 2026 earnings season start?
PepsiCo reported on October 8 and Delta Air Lines on October 9. The season starts in earnest on October 13 and 14, when the largest US banks report. Most S&P 500 companies report over the following four weeks.
How much are S&P 500 earnings expected to grow in Q3 2026?
FactSet put expected earnings growth at 29.5% as of October 2, 2026, up from 26.7% on June 30. Revenue is expected to grow 12.3%. Other firms have slightly different numbers. Goldman Sachs cites about 27%.
Which sectors are expected to grow the most?
All eleven S&P 500 sectors are expected to report higher profits than a year ago. Energy, information technology, communication services and materials are expected to lead. Energy is helped by oil above $100 a barrel.
Why do stocks sometimes fall after good earnings?
Because the good news was already expected. A stock's price reflects what investors think will happen. If profits rise 30% and everyone expected 30%, there is no surprise. Prices move on the gap between results and expectations, and on what the company says about the future.
Is the stock market expensive right now?
By one common measure it is close to average. The S&P 500 trades at about 19.0 times the profits expected over the next 12 months. The five-year average is 19.8 and the ten-year average is 19.1. Prices are near record highs, but profits have grown almost as fast.
Primary sources
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 9, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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