The third-quarter earnings season is shaping up to be far more resilient than analysts expected earlier this year, according to strategists at Deutsche Bank. They believe corporate results are tracking ahead of forecasts made before the April market downturn triggered by Donald Trump’s tariff announcements.
The team led by Binky Chadha highlighted that earnings surprises have been “consistently strong” — exceeding historical averages in both scope and size across profit, revenue, and margins.
“If beats continue at these rates, earnings growth for the S&P 500 is on track to pick up strongly from 9.3% yoy in Q2 to 13.2% in Q3, near the top of the range of the last 2 years,” the strategists wrote in a note.
Although most of the gains remain concentrated among mega-cap names in the technology and financial sectors, Deutsche Bank said there are early signs of recovery in other industries starting from lower baselines.
The strategists also noted that earnings forecasts for 2026 “have steadily climbed,” reaching levels seen before what they referred to as “Liberation Day” in April.
So far, companies reporting results have not flagged any major changes in demand patterns and continue to say tariffs are manageable. Deutsche Bank added there is “heightened focus on raising productivity and cutting costs, with or without help from AI.”
The bulk of S&P Global 500 companies are expected to release their earnings over the next two weeks.