Analysts project 22% year-over-year EPS growth for the S&P 500, raising concerns over lofty expectations amid macroeconomic pressures.
Analysts expect S&P 500 earnings per share to grow 22% year over year in the second quarter, the highest forecast since 2021. This follows a first-quarter surge where actual EPS growth exceeded estimates by 15 percentage points, reaching 27%.
Prior to the first quarter, consensus estimates had projected 12% EPS growth. The elevated bar for the current quarter suggests smaller upside surprises, as companies face challenges including higher input costs and margin pressures linked to geopolitical tensions.
Investors are closely watching megacap tech firms like Microsoft and Meta to justify AI-driven capital expenditures, while corporate guidance will be scrutinized for signs of a widening consumer divergence favoring budget products.