S&P 500 earnings: Second quarter starts strong
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S&P 500 earnings: Second quarter starts strong

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Barbara Reinhard

Barbara Reinhard, CFA

CIO, Multi-Asset Strategies and Solutions

Sunset over mountains

Second quarter 2025 earnings are off to a solid start. With 12% of S&P 500 companies having reported so far, 83% have beaten both earnings and revenue expectations. The blended year on year earnings growth rate is 5.6% so far. If the rest of the index reports in line with this trend, it will mark the eighth straight quarter of S&P 500 earnings growth, though the slowest since late 2023. 

Once again, the “Magnificent Seven” are doing the heavy lifting, expected to post earnings growth of 14.1%, while the remaining 493 companies are forecast to grow at a more mild 3.4%. Revenue growth is holding steady at 4.4%, and net profit margins remain healthy at 12.3%. 

Although valuations are on the higher side, with the index’s forward P/E ratio of 22.2x above both the 5- and 10-year averages, we continue to favor high-quality U.S. large caps with strong pricing power and operational flexibility in this macro environment. Given the resilience of U.S. markets, we maintain a positive view on domestic equities relative to international markets. 

Maverick Lin contributed to this article. All data sourced from FactSet.

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