S&P 500 Companies Raise Earnings Guidance at 15-Year High as 93% Beat Estimates on July 26

According to Yahoo Finance, on July 26, U.S. companies in the S&P 500 are raising earnings guidance at the widest rate since 2011, signaling unusually optimistic profit outlooks. However, the stock market has failed to reflect this strength, with the index remaining near early summer levels as previously concentrated AI-related inflows have reversed.

Fundstrat data shows that 93% of companies that reported earnings through July 22 beat expectations, significantly exceeding the five-year average of 78%. The blended earnings growth rate—combining already-reported results and forward estimates—is nearing 25%, marking the second consecutive quarter above 20%. Despite this outperformance, companies that posted better-than-expected results averaged a 0.1% stock price decline, contrasting sharply with the historical five-year average gain of 1%. Analysts attribute this disconnect to valuation: the S&P 500 already trades at over 20 times forward price-to-earnings, near or above historical highs, leaving little room for positive surprises to drive further gains.