The latest earnings season has shown some bullish indicators despite concerns sparked by Nvidia’s (NVDA) recent earnings report and the impact of tariffs on markets. According to a new analysis, the S&P 500 reported an impressive earnings growth of nearly 18% as of Thursday, marking the highest growth since the fourth quarter of 2021, per data from FactSet. Additionally, 77% of companies exceeded Wall Street’s earnings per share (EPS) estimates, aligning with the five-year average.
Financial institutions emerged as the top-performing sector within the S&P 500, achieving a remarkable 55% growth in earnings this season, as highlighted in FactSet’s recent infographic.
Tariffs were a significant topic of discussion during earnings calls, reflecting broader market concerns. Between December 15 and February 21, at least 221 companies mentioned the term “tariffs” in their earnings calls, according to FactSet. U.S. President Donald Trump announced on Thursday that tariffs on Mexico and Canada would take effect on March 4, with additional tariffs planned for China. Economists have warned that these steep tariffs could lead to higher consumer product prices, potentially reigniting inflation and hindering economic growth.
Adding to the cautious outlook, FactSet’s research revealed that 72 companies issued negative EPS guidance, surpassing the five-year average of 56. Despite some positive earnings trends, the combination of tariff uncertainties and Nvidia’s underwhelming performance has kept markets on edge.
— news from Investopedia