Corporate America posts record earnings, fueling US stocks’ rally

Wall Street braced for pain. What it got instead was one of the strongest earnings seasons in two decades.

A full 84% of S&P 500 companies have exceeded Q1 2026 earnings projections, according to FactSet data from May 6. That figure handily tops the five-year average of 78%, and it’s happening against a backdrop that, on paper, should have made corporate America sweat: an ongoing conflict in Iran, rising energy costs, and inflation that refuses to fully cooperate.

The S&P 500 hit record highs on April 30, capping its best month since 2020.

The numbers behind the momentum

Deutsche Bank analysts have called this one of the most impressive earnings seasons in two decades. Their reasoning goes beyond a single sector carrying the load. They’ve highlighted potential growth across all 11 S&P sectors, a rare achievement that suggests this isn’t just Big Tech dragging the index higher while everything else treads water.

US corporate profits surged to $3,605.67 billion in Q4 2025, a 5.8% jump from Q3 and a 10.8% increase year-over-year, according to Trading Economics.

Uber posted 25% growth in bookings. Disney reported strong visitor turnout at its parks. CVS Health issued an optimistic 2026 forecast, signaling confidence in healthcare demand and operational efficiency.

What this means for investors

The 84% beat rate is impressive, but context matters. Companies and analysts play a well-known game each quarter: management guides conservatively, analysts lower estimates, and then companies “beat” projections that were already sandbagged. That dynamic inflates beat rates structurally.

Still, the gap between the current 84% and the five-year average of 78% is wide enough to suggest something real is happening. Six percentage points above the norm isn’t just accounting theater.

The all-sector growth story is particularly worth watching. In recent years, market rallies have been top-heavy, driven by a handful of mega-cap tech names. If this earnings season genuinely reflects broad-based strength across all 11 S&P sectors, it could signal a healthier, more sustainable rally.