U.S. corporate earnings growth expectations continue to cool, analysts warn of limited room for fault tolerance for highly valued U.S. stocks

Data compiled by Bank of America on October 13 showed that the S & P 500 's third-quarter profit forecast remains strong, but profit growth in 10 of the 11 sectors is expected to slow down from the previous quarter. Based on data compiled by industry research, analysts expect that the earnings growth rate of the S & P 500 index will be 25% and 28% respectively in the third and fourth quarters of 2026, and will slow to 18% in the first half of 2027. This indicates that the overall earnings outlook will weaken slightly in the future. Slowing earnings growth expectations in itself is not enough to end the stock market rally. However, with U.S. stocks approaching historical highs and growing concerns that inflationary pressures are more stubborn than expected, U.S. companies can only deliver strong enough results to push the stock market to new highs. Luca Paolini, chief strategist at Pytec Asset Management, pointed out: "Earnings growth momentum may be peaking, and we have seen early signs. Because the threshold for earnings growth expectations is so high, even if the results are only slightly below expectations, it may trigger a violent market reaction."