The Q2 2026 earnings season is running well ahead of expectations. With 27% of S&P 500 companies reporting as of July 24, 2026, the blended earnings growth rate is 37.9%, up from 23.2% at the end of the quarter, and 86% of reporting companies have beaten EPS estimates [1]. A single item explains much of the jump: Alphabet (GOOGL) booked a $98 billion gain that lifted its EPS to $9.11 against an estimate of $2.88, and excluding Alphabet the blended growth rate is 25.9% [1]. Even on that adjusted basis, this is the second consecutive quarter of growth above 20% for the index [2].
Q2 2026 earnings season: the headline numbers
FactSet's blended growth rate combines actual results for companies that have reported with estimates for those that have not. The measure has moved sharply during July [1][2][3]:
| Date | Companies reported | Blended EPS growth | Blended revenue growth |
|---|---|---|---|
| June 30 (estimate) | 0% | 23.2% | 12.2% |
| July 17 | 10% | 24.7% | 12.8% |
| July 24 | 27% | 37.9% | 13.2% |
| July 24, excluding Alphabet | 27% | 25.9% | n/a |
Revenue growth of 13.2% would be the highest for the index since the second quarter of 2022, when revenues grew 13.9% [1][2]. Unlike the earnings figure, the revenue figure is not distorted by one-time gains, which makes it the cleaner signal of underlying demand.
Beat rates versus the 5-year and 10-year averages
Both the share of companies beating estimates and the size of the beats are above normal. As of July 24, 86% of companies have reported EPS above the mean estimate, compared with a 5-year average of 78% and a 10-year average of 76% [1]. Companies in aggregate are reporting earnings 39.3% above estimates, against 5-year and 10-year averages of 7.0% and 7.4%; excluding Alphabet the surprise percentage is 12.6%, still well above average [1]. On the revenue side, 80% of companies have beaten estimates, above the 5-year average of 70% and the 10-year average of 68%, and revenues in aggregate are 2.8% above estimates versus averages of 1.9% and 1.6% [1].
Why the beats are larger than usual
Part of the answer is that estimates were raised into the quarter rather than cut. FactSet's July 2 preview noted that estimated Q2 EPS for the index rose 3.4% between March 31 and June 30, when a decline is the typical pattern, and that 63 of the 111 companies issuing Q2 guidance guided above consensus, a 57% positive rate against a 10-year average of 41% [3]. Companies that had already told investors to expect more still delivered more, which points to demand that accelerated during the quarter rather than to conservative guidance.
Growth by sector: leaders and the one laggard
Ten of the eleven sectors are reporting year-over-year earnings growth. Four are reporting double-digit growth, led by Energy, Communication Services, Information Technology and Materials [1]. Health Care is the only sector reporting a year-over-year decline in earnings, a pattern that has held since the first FactSet update on July 17 [1][2]. All eleven sectors are reporting revenue growth, led by Information Technology, Energy, Communication Services and Financials [1].
The sector pattern matches what the stock market rewarded in the first half. Energy earnings reflect crude prices that averaged far above the year-earlier level after the spring supply disruptions. Technology and Communication Services reflect the capital spending cycle in artificial intelligence infrastructure. Financials show up among the revenue leaders because of strong capital markets activity at the large banks, which reported in mid-July. Health Care is the exception: pricing pressure and patent expirations at the large pharmaceutical companies outweigh volume growth elsewhere in the sector.
Trailing multiples going into the season already reflected those differences. DataPorium's sector P/E series for Nasdaq-listed companies showed a trailing P/E of 47.5 for Technology, 23.9 for Healthcare and 17.1 for Energy on July 7, 2026 [5]. Readers can follow how sector multiples move as results arrive on DataPorium's stock market page [5].
Estimates for the rest of 2026 keep rising
Analysts have responded to the results by raising forecasts for later quarters rather than by treating the beats as pulled-forward demand. As of July 24 they project earnings growth of 27.3% for Q3 2026 and 24.9% for Q4 2026, and 27.3% for the full calendar year [1]. A week earlier the same estimates were 27.0%, 24.6% and 24.5% [2], and at the start of the month the calendar-year figure was 24.1% [3]. The forward 12-month P/E ratio is 20.1, above the 5-year average of 19.9 and the 10-year average of 19.0, but down from 20.4 on June 30 because the earnings estimate has risen faster than the index [1].
The index itself has not followed the earnings higher. The S&P 500 closed at 7,411.98 on July 24, down 1.2% from 7,499.36 at the end of June and 8.3% above its 2025 close of 6,845.50 [4]. The muted response suggests investors are weighing the capital spending plans that accompany the technology sector's results against the earnings gains themselves. The main points investors may consider from the first third of the season:
- Underlying earnings growth of about 26% excluding Alphabet's gain is the second straight quarter above 20% for the index [1][2].
- Revenue growth of 13.2%, not accounting gains, is the better measure of demand and is the highest since 2022 [1].
- Health Care is the only sector with falling earnings, and its weight in the index has shrunk as technology has grown [1].
- The forward multiple has fallen slightly during the season because estimates rose faster than prices [1][4].
The second-quarter results are strong even after removing Alphabet's one-time gain, and the market's flat response reflects a debate about capital spending rather than any doubt about current profits.
Key takeaways
- Blended Q2 2026 earnings growth is 37.9% as of July 24, or 25.9% excluding Alphabet's $98 billion gain, with 27% of companies reported [1].
- 86% of companies beat EPS estimates and 80% beat revenue estimates, both well above 5-year and 10-year averages [1].
- Energy, Communication Services, Information Technology and Materials lead with double-digit growth; Health Care is the only sector with a decline [1].
- Calendar 2026 earnings growth is now projected at 27.3%, and the forward P/E has eased to 20.1 from 20.4 at quarter-end [1].
- The S&P 500 closed at 7,411.98 on July 24, 1.2% below its June 30 level despite the results [4].
Frequently asked questions
What is the S&P 500 earnings growth rate for Q2 2026?
As of July 24, 2026 the blended year-over-year earnings growth rate is 37.9%, or 25.9% when Alphabet's $98 billion one-time gain is excluded, according to FactSet [1].
What percentage of S&P 500 companies beat estimates in Q2 2026?
86% of the companies that had reported by July 24 beat EPS estimates and 80% beat revenue estimates, compared with 10-year averages of 76% and 68% [1].
Which sector had the weakest earnings in Q2 2026?
Health Care is the only S&P 500 sector reporting a year-over-year decline in earnings for the second quarter of 2026 [1].
Why did the S&P 500 fall during a strong earnings season?
The index closed at 7,411.98 on July 24, 1.2% below June 30, even though earnings estimates for the full year rose to 27.3% growth; the forward P/E fell to 20.1 from 20.4 as a result [1][4].
Sources & References
- [1] FactSet Insight: S&P 500 Earnings Season Update, July 24, 2026
- [2] FactSet Insight: S&P 500 Earnings Season Update, July 17, 2026
- [3] FactSet Insight: S&P 500 Earnings Season Preview, Q2 2026 (July 2, 2026)
- [4] S&P 500 (SP500), FRED, Federal Reserve Bank of St. Louis
- [5] DataPorium Stock Market Analytics
