S&P 500 profit growth hits fastest pace in 5 years
SkimNews Take
The S&P 500's broadening profit growth suggests a more resilient market, as a wider array of companies are now contributing to overall earnings momentum rather than relying solely on a few dominant players.
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- The 493 S&P 500 companies outside the Magnificent Seven posted 17.4% earnings growth in Q1 2026 — the highest rate for that group since Q4 2021, according to FactSet.
- The Magnificent Seven (Nvidia, Microsoft, Alphabet, Amazon, Meta, Apple, Tesla) delivered 63.2% EPS growth for the quarter, their biggest gain since Q2 2021.
- Overall S&P 500 earnings rose 28.4% in Q1 2026, with 10 of 11 FactSet-tracked industry sectors reporting growth, mostly in the double digits.
- Micron Technology broke into the top five contributors to S&P 500 earnings growth alongside four Magnificent Seven members — Nvidia, Alphabet, Amazon, and Meta.
- Ford's consumer-discretionary boost came partly from a big tariff refund, while the materials sector rode surging demand for fertilizer and lithium.
- Retailers are flashing caution: Home Depot flagged consumer reluctance on big-ticket home projects, e.l.f. Beauty plans price cuts, and Target's turnaround drew investor skepticism about durability.
Why it matters: The earnings story is broadening beyond the seven AI-driven names that have carried the index for three years — 10 of 11 sectors grew in double digits and Micron cracked the top-five contributor list, suggesting a healthier market base. But retailers' Q1 warnings on big-ticket spending and a memory-chip supply crunch tied to the multitrillion-dollar AI buildout raise real questions about whether that breadth survives Q2.
