S&P 500 1Q26 earnings significantly beat expectations, with TECH+ continuing to lead growth

Overview

This report is UBS's interim briefing on the 1Q26 earnings season for the US equity market, focusing on S&P 500 revenue, margins, EPS growth, earnings beats, sector dispersion, and the reporting calendar ahead. As of the report date, 84.0% of S&P 500 market cap has reported results, revenue and EPS expectations remain robust, and TECH+ continues to be the core driver of index earnings growth.

Core views

The core view is that 1Q26 S&P 500 earnings have been stronger than expected, with EPS growth driven mainly by corporate profit growth and margin contributions; TECH+, Big 6 TECH+, and Materials are significantly outperforming the index, while Financials are also delivering strong EPS growth; Energy is roughly flat, Health Care and Telcos are negative, and Non-Cyclicals are relatively weak. Current consensus indicates that only TECH+ and Materials are expected to outperform the S&P 500, while Energy is a drag on 1Q earnings.

Analysis framework

The report uses a blend of reported actual results and consensus estimates for yet-to-report companies to break down year-on-year revenue, margins, earnings, buybacks, and EPS growth for the S&P 500 and its sector groups, while also incorporating earnings beat rates, revenue and EPS beat/miss thresholds, and post-report revision trends to assess earnings-season quality.

Methodology notes

• earnings_trackingactuals_estimates_blend

  Blend of actuals and estimates

  Uses actual results for companies that have already reported and consensus estimates for those that have not, in order to form interim growth estimates for the 1Q26 S&P 500 and its sector groups.

• surprise_analysisbeat_miss_threshold

  Revenue and earnings beat/miss thresholds

  The report states that revenue beat/miss is defined by a positive or negative 0.25%, and earnings beat/miss by a positive or negative 1.0%, which are used to build the surprise dashboard and price reaction table.

• return_definitionforecast_stock_return

  Forecast Stock Return

  The disclosure page defines FSR as the sum of expected price appreciation over the next 12 months plus dividend yield; however, the main body of this report is an index earnings brief and does not provide single-stock target prices.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• S&P 500

  Core coverage index

  Strengths

  Revenue growth of 11.2%, EPS growth of 28.4%, a 17.3% earnings beat, and a high reporting completion rate.

  Weaknesses

  Growth contributions are concentrated, and some sector groups are relatively weak.

  Comparison

  Overall stronger than most non-TECH+ sectors; only TECH+ and Materials are expected to outperform the index.

  Risks

  Corporate earnings, interest rates, risk premia, and business-cycle changes could alter the outlook.

• TECH+

  Primary growth driver

  Strengths

  Expected EPS growth of 59.6%, with both revenue growth and margin expansion remaining strong.

  Weaknesses

  Index earnings depend heavily on a small number of large technology companies.

  Comparison

  Substantially above the S&P 500's overall 28.4% and the S&P 500 ex-TECH+'s 11.1%.

  Risks

  High expectations, valuation sensitivity, and company-level performance dispersion could drive volatility.

• Big 6 TECH+

  Large-cap technology sub-group

  Strengths

  Expected EPS growth of 61.2%, far above the 17.9% expected for other market companies.

  Weaknesses

  There is meaningful dispersion across company forecasts, and growth is not fully synchronized.

  Comparison

  Actual growth for AMZN, META, and GOOGL is notably above prior expectations, while MSFT and AAPL also delivered positive growth.

  Risks

  Upcoming reports from NVIDIA and others may influence the market's view of technology earnings momentum.

• Financials

  Strong sector group

  Strengths

  Expected EPS growth of 24.7%, supported by both revenue and margin contributions.

  Weaknesses

  Growth is slower than TECH+ and Materials.

  Comparison

  Above most cyclical and non-cyclical sectors, but below the S&P 500's overall EPS growth.

  Risks

  Changes in interest rates, credit cycles, and macro risk premia could affect future earnings.

• Energy

  Drag

  Strengths

  Revenue is still expected to grow 4.4%.

  Weaknesses

  Margin and buyback contributions are negative, and EPS growth is 0.0%.

  Comparison

  Clearly lags the S&P 500 overall and most growth sectors.

  Risks

  Commodity prices, margins, and capital-return changes could continue to weigh on earnings.

Key data

• S&P 500 market cap reported84.0%The main text says 84.0% of S&P 500 market cap has reported 1Q26 results.
• S&P 500 1Q26 revenue growth expectation11.2%Based on a blend of consensus estimates and reported actual results.
• S&P 500 1Q26 EPS growth expectation28.4%Current consensus view; using historical revision trends, final reported growth is estimated at 28.6%.
• S&P 500 earnings beat magnitude17.3%As of the report date, aggregate earnings from reported companies are 17.3% above expectations.
• Companies beating expectations78%The report says that 78% of companies have beaten forecasts so far.
• TECH+ EPS growth expectation59.6%TECH+ is one of the strongest growth groups.
• Big 6 TECH+ EPS growth expectation61.2%The Big 6 TECH+ group is expected to outperform materially.
• S&P 500 ex-Big 6 TECH+ EPS growth expectation17.9%Used as a comparison against Big 6 TECH+'s 61.2%.
• Financials EPS growth expectation24.7%Financials are growing strongly, though below TECH+.
• Energy EPS growth expectation0.0%The report views Energy as a drag on 1Q earnings.
• Companies still to report over the next 5 trading days12 companies, representing 9.9% market capIncludes Applied Materials, Home Depot, Keysight Tech, and NVIDIA.

Impact & implications

For investment implications, the 1Q26 earnings season reinforces the resilience of large-cap US earnings and the profit leadership of technology giants, but it also shows that growth is highly differentiated. Strong index-level EPS growth does not mean all sectors are improving in tandem; investors need to distinguish the upside momentum in TECH+ and Materials, the steady performance of Financials, and the earnings pressure facing Energy, Health Care, Telcos, and some defensive sectors.

Risks

• Corporate earnings, interest rates, risk premia, and other business-cycle-sensitive variables may change.
• The current data combine reported actuals with consensus estimates for companies that have not yet reported, and subsequent releases may change the final growth rate.
• Index growth is heavily reliant on TECH+ and large-cap technology companies, so sector concentration may amplify market volatility.
• Weak sectors such as Energy, Health Care, and Telcos may weigh on the quality of index earnings.
• The report's views are as of the publication date, and UBS may change its views without prior notice.

What to watch

• The 12 companies scheduled to report over the next five trading days, especially NVIDIA, Applied Materials, Home Depot, and Keysight Tech.
• Whether final S&P 500 EPS growth is revised from the current 28.4% to around 28.6%.
• Whether the earnings strength of TECH+ and Big 6 TECH+ can continue, and how much they contribute to overall index growth.
• Whether Materials continues to outperform the S&P 500 alongside TECH+.
• Whether Energy margins, buybacks, and earnings continue to act as a drag.
• Whether price reactions after revenue and earnings beats/misses show a change in the market's reward or punishment for surprises.