Earnings season is when your market assumptions either hold up or fall apart. It\u2019s when we find out how the big themes \u2013 tariffs, energy prices, AI \u2013 are really affecting companies.<\/p>\n\n\n\n
So before we get swept up in the beats, the misses, and all the other earnings headlines, let\u2019s talk about what matters: why expectations look the way they do, what investors are really listening for, and what it could mean for portfolios.<\/p>\n\n\n\n
What\u2019s happened in markets so far?<\/h2>\n\n\n\n
Let\u2019s not sugarcoat it: 2026 hasn\u2019t been the year investors wanted. The S&P 500 fell 5% last quarter, and the mood has swung between cautious and downright nervous. And a couple of big forces are largely to blame.<\/p>\n\n\n\n
First, tariffs. America\u2019s new trade measures \u2013 the biggest tax increase as a share of economic output since 1993 \u2013 have created the kind of uncertainty that messes with CEOs and consumers<\/a> alike. Estimates suggest that the average US household is staring at $1,500 a year in added costs, and business investment has largely flatlined as companies wait for policy to settle.<\/p>\n\n\n\n Second, Iran. In late February, joint US-Israeli airstrikes helped spark a conflict that jolted global energy markets. The closure of the Strait of Hormuz \u2013 a major chokepoint for oil and gas \u2013 triggered a supply shock that markets really don\u2019t like. The benchmark Brent crude price jumped in the weeks that followed, hitting levels not seen since 2022.<\/p>\n\n\n\n Put it together, and you get the classic nasty combo: slow growth and hot, sticky inflation<\/a>. Estimates for US economic expansion have now fallen to just 2.2% for the year, while inflation expectations have been heading in the other direction. And now, traders are betting there won\u2019t be an interest<\/a> rate cut until December \u2013 at the earliest.<\/p>\n\n\n\n Energy and Materials stocks have been strong outperformers so far this year. Source: KoyFin.<\/em><\/p>\n\n\n\n Here\u2019s the really interesting part. Even with all that big-picture mess, the bar for first-quarter earnings is still pretty high. The S&P 500 is expected to post earnings-per-share (EPS) growth of 13% compared to a year ago, marking a sixth-straight quarter of double-digit improvement. Revenue<\/a> is forecast to rise 9.7% \u2013 which is higher than the 8.2% analysts expected at the start of the year. Overall, eight of the 11 sectors are still expected to show positive earnings growth.<\/p>\n\n\n\n Tech is the big-hitter, naturally. Analysts are looking for 45% EPS growth \u2013 the strongest of any sector \u2013 driven by AI infrastructure spending that still looks strong. Semiconductors, cloud platforms, and enterprise software are all expected to post good numbers.<\/p>\n\n\n\n Materials is next at around 24%, helped by commodity<\/a> tailwinds and steady industrial demand. Financials, in third place, sit at about 15%, with insurance as the standout. Reinsurers in particular are expected to post huge growth \u2013 roughly 90% \u2013 repricing after catastrophic winter claims, while the broader insurance industry is expected to grow around 34%.<\/p>\n\n\n\n On the weaker side, healthcare is expected to decline by about 10%, but that\u2019s mostly because of a one-time acquisition charge at Merck<\/strong>. Without that, the sector would still be growing by nearly 3%.<\/p>\n\n\n\n Energy has been the biggest roller coaster. It was tracking 13% growth just two weeks ago, before production disruptions and hedging losses caused ExxonMobil<\/strong> to revise down its guidance, pulling the sector back to roughly flat. Exclude Exxon, though, and the rest of the sector is still on track for 12.5% growth.<\/p>\n\n\n\n Tech is expected to have had the fastest earnings per share (EPS) growth last quarter, and valuations already are reflecting that. *Estimated earnings projections. Source: FactSet.<\/em><\/p>\n\n\n\n Results are one thing. But what investors will really be listening for is guidance \u2013 the forward-looking comments from management teams that tell you whether the next quarter is likely to be better\u2026 or worse. Four themes are expected to dominate this earnings season’s investor conference calls.<\/p>\n\n\n\n The Iran conflict and oil sustainability<\/strong>.<\/p>\n\n\n\n This is the defining variable of 2026 so far. With the Strait of Hormuz closure still reverberating through energy markets and Brent crude sitting close to $100 a barrel, any company with meaningful fuel exposure is going to get grilled. For energy producers, the windfall is obvious, but investors will be trying to figure out whether current prices are sustainable or whether a ceasefire or reopening of the Strait could unwind things in a hurry. For chemical, logistics, or manufacturing names (not to mention airlines), elevated fuel costs are a margin<\/a> headache that could overshadow otherwise decent results. The World Economic Forum has warned that a sustained conflict scenario could shave 0.6 percentage points off global economic growth in the first half of this year alone. And that\u2019s a lot.<\/p>\n\n\n\n Tariff pass-through<\/strong>.<\/p>\n\n\n\n For consumer<\/a>-facing companies, the central question is whether they\u2019re raising prices or taking the hit through lower margins. Analysts will be listening closely \u2013 especially for consumer discretionary and industrial companies.<\/p>\n\n\n\n AI spending confirmation<\/strong>.<\/p>\n\n\n\n The hyperscalers \u2013 Microsoft, Alphabet, Amazon, Meta<\/strong> \u2013 are still expected to spend big on AI infrastructure. And any sign of hesitation will send shockwaves through the tech sector and its suppliers. On the flip side, a doubling down on AI capital expenditures (capex) could spark a relief rally in a sector that’s been under pressure. So watch those capex numbers: they could set the tone for the rest of the year.<\/p>\n\n\n\n The American consumer<\/strong>.<\/p>\n\n\n\n Tariffs are squeezing household budgets, oil is driving up energy bills, and confidence surveys have been soft. Results from retail and consumer discretionary names will give the most real-time read on whether spending has actually buckled \u2013 or whether folks are grumbling but still shopping.<\/p>\n\n\n\n Earnings season is famously less about the numbers themselves and more about people\u2019s reaction to them. Investors react to surprises \u2013 so the key question is always whether a stock<\/a>‘s current price already reflects the good news or the bad.<\/p>\n\n\n\n That matters a lot right now, because some of the obvious winners already look pretty crowded. Energy stocks, for example, have had a huge run this year, and for good reason: higher oil prices have been a major tailwind. But that also means a lot of the good news is already factored into the price.<\/p>\n\n\n\n That\u2019s why the best defensive opportunities might not be the most obvious ones. Take healthcare, for instance. The sector\u2019s expected earnings decline is almost entirely a Merck accounting story \u2013 the underlying sector is growing, and AI-driven drug discovery is a genuine long-term money-maker. Similarly, the consumer discretionary earnings bar has been cut sharply (from nearly 7% growth expectations to below 2%), so the sector doesn’t need to perform brilliantly<\/em> to beat. Utilities are another great example. They might not be exciting, but in a market like this, boring can be beautiful. They still have defensive appeal and a structural advantage from rising electricity demand and grid investment.<\/p>\n\n\n\n Tech is the hardest call. Expectations are still extremely high, and investors no longer have infinite patience for AI spending unless there\u2019s some sign of a payoff. That doesn\u2019t mean the sector is broken. It just means the bar is high \u2013 really high. If the biggest players deliver and convince investors that the spending is still worth it, tech could bounce. If not, there is room for more disappointment. And that tension has already been showing up in markets.<\/p>\n\n\n\n The bigger takeaway is that this probably isn\u2019t the moment for big, heroic bets on a single theme. Too much can still change \u2013 tariffs, oil, inflation<\/a>, interest<\/a> rates. A more balanced approach makes sense here: some exposure to areas with earnings momentum, some exposure to steadier defensive pockets, and a willingness to avoid parts of the market where the narrative already feels fully priced.<\/p>\n","protected":false},"excerpt":{"rendered":" Markets are jittery about tariffs, oil prices, and the health of the US consumer. But company results and guidance will sort out what\u2019s real and what\u2019s not.<\/p>\n","protected":false},"author":1290,"featured_media":184228,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6,8,9,22,26,3],"tags":[],"contributors-categories":[13597],"class_list":{"0":"post-241812","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-stocks","11":"category-text-articles","12":"category-traders-insight","13":"contributors-categories-finimize"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"\n![\"Energy](\"https:\/\/finimize.com\/_next\/image?url=https%3A%2F%2Ffinimize-img.imgix.net%2Fhttps%253A%252F%252Fchivas-assets.s3-eu-west-1.amazonaws.com%252Fstatic%252Fimages%252FSector_perf_BB.original.png%3Fixlib%3Dpython-3.1.2%26s%3D58c61aacee042cb909a339bac4ae3254&w=3840&q=75\")
<\/figure>\n\n\n\nWhat\u2019s Wall Street predicting for this earnings season?<\/h2>\n\n\n\n
![\"Tech](\"https:\/\/finimize.com\/_next\/image?url=https%3A%2F%2Ffinimize-img.imgix.net%2Fhttps%253A%252F%252Fchivas-assets.s3-eu-west-1.amazonaws.com%252Fstatic%252Fimages%252FEstimated_EPS_growth_BB.original.png%3Fixlib%3Dpython-3.1.2%26s%3Dbffc749aa1de61b02012381c1ee62c23&w=3840&q=75\")
<\/figure>\n\n\n\nWhat are the big themes to watch for?<\/h2>\n\n\n\n
And what does this mean for your portfolio?<\/h2>\n\n\n\n