Earnings Season Kicks Off: What Are Wall Street's Predictions?

US earnings season has kicked off, presenting a significant test for the stock market's 2024 performance. 

S&P 500 companies are expected to report the weakest earnings growth in four quarters, with a 4.3% increase in Q3 profits year-over-year, down from an 8.4% rise projected in June, according to Bloomberg Intelligence. 

Despite this, the S&P 500 reached a new high and is up 22% in 2024, suggesting potential for positive earnings surprises as seen in Q1 when growth beat expectations.

The Magnificent Seven—Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla—expected to report a third-quarter profit increase of 18%. Meanwhile, the remaining S&P 500 companies are anticipated to see a more modest 1.8% profit rise in Q3, following a 9.1% growth in Q2. However, profits for the other 493 firms are projected to surge, with double-digit gains expected by Q1 2025.