The stock market is earning new highs

Accelerating revenue growth boosts profits

S&P 500 revenue growth, percent change vs. year ago

Source: FactSet, as of August 17, 2026.

For those puzzled by the stock market’s ascent despite adverse headlines, corporate profits offer a compelling explanation. With over 90% of companies having reported, second-quarter S&P 500 earnings rose 50% from a year ago. That remarkable statistic was boosted by outsized gains from Amazon and Alphabet. Excluding those two companies, earnings still grew 32%—the seventh straight quarter of double-digit growth.

The earnings picture is even more impressive given the strength of revenue growth. The chart shows revenue rising 15% from a year earlier, marking the fifth consecutive quarter of acceleration. Energy and technology posted the strongest sales gains, but all 11 S&P 500 sectors were positive.

Looking ahead, analysts expect solid profit growth in the second half of the year, with gains of more than 25% in both the third and fourth quarters. Valuations, measured by price-to-earnings ratios, remain elevated. Sustained earnings growth will be needed to support those valuations.

What we’re watching this week

Wednesday: Nvidia, the largest US company by market capitalization, reports its fiscal second-quarter earnings. Analysts expect profits to nearly double from a year earlier.

Friday: Chair Warsh speaks at the Fed’s annual Jackson Hole policy symposium. Although the conference theme is financial innovation, investors will be listening for clues about his current views on monetary policy.