US Stocks Enter Q4 Earnings Season: JPMorgan and Goldman Sachs Agree — Broader Rally Ahead
Although the Q4 earnings season for US stocks has just begun, some of Wall Street's top strategists are already spotting early signs that the market rally is broadening beyond the core large-cap tech stocks fueling the AI boom.
Broader Gains Coming for US Stocks
JPMorgan's analysis shows that among the S&P 500 companies that have already provided 2026 guidance, roughly half have exceeded market expectations.
JPMorgan strategist Dubravko Lakos-Bujas wrote in a note: “Since most of the companies that have reported so far are outside the tech sector, this trend suggests broader growth across other industries this year.”
Goldman Sachs reached a similar conclusion.
The Goldman Sachs strategy team, led by Ben Snider, forecasts robust US economic growth in the first half of 2026, which creates short-term tailwinds for smaller, more cyclical stocks that are larger than those for mega-caps. They conclude that improving corporate earnings will support further upside in equities.
Other indicators also back the view of a widening rally. Year-to-date in 2026, the market-cap-weighted S&P 500 is up about 1%, while the equal-weighted version (which reduces the influence of mega-cap tech) has gained nearly 4%.
Additionally, the percentage of S&P 500 stocks trading above their 200-day moving average is now near the highest level in the past year.
Investors Looking Beyond the Magnificent Seven
For the past two years, US stocks have been almost entirely driven by the “Magnificent Seven.” But now, with analysts expecting the earnings growth gap between the tech giants and the rest of the S&P 500 to narrow, investors are shifting attention to traditional parts of the economy — banks, consumer staples, and mining companies.
Procter & Gamble (PG) is a prime example. Its shares rose 2.7% last Thursday after a strong earnings report, with executives noting improving US sales trends and expressing confidence in meeting full-year guidance.
United Airlines (UAL) has also seen recent gains, as the company guided to strong performance this year amid rising demand.
This week marks the “hot” phase of earnings season, with roughly one-third of S&P 500 companies expected to report. Thursday will be a particularly big day — “Super Thursday” — featuring earnings from tech heavyweights Microsoft, Meta, and Tesla, alongside results from Boeing, General Motors, Starbucks, ExxonMobil, and others.
Investors will be watching closely to see if improving outlooks from a wider range of companies drive further broadening of the rally.
Caveat from Goldman Sachs
Goldman Sachs strategists caution that US economic growth is likely to slow in the second half of 2026 and into 2027, which “could limit the scope for a sustained broad and comprehensive rotation in US equities.”