Physical Address

304 North Cardinal St.
Dorchester Center, MA 02124

S&P 500 Earnings Growth Could Double in the 4th Quarter of 2024

Equity analysts are optimistic about S&P earnings for the rest of 2024, saying they expect earnings growth to shift into high gear, from single digits in the third quarter to double digits in the fourth quarter.
That’s according to FactSet, which monitors closely the financial performance of S&P 500 companies.
The world’s most closely followed equity index reported an annual earnings growth of 5.8 percent in the third quarter of 2024. But analysts predict better days ahead, with estimated earnings expected to grow by more than double that rate, at 12 percent, in the fourth quarter of 2024. In addition, they see earnings growth accelerating in 2025, from low teens at the beginning of the year to high teens at the end.
“It is interesting to note that analysts believe double-digit earnings growth will continue for the S&P 500 through all four quarters of 2025. The estimated earnings growth rates for Q1 2025 through Q4 2025 are 12.7%, 12.1%, 15.3%, and 17.0%.”
Most of the earnings growth is expected to be concentrated in six sectors: financials (38.9 percent), communication services (20.7 percent), information technology (13.9 percent), utilities (12.9 percent), health care (12.6 percent), and consumer discretionary (12.5 percent).
Within industries, banks will be the most significant contributors to the S&P 500 earnings growth, followed by semiconductors and semiconductor equipment, pharmaceuticals, interactive media and services, and broadline retail.
For other industries, such as semiconductors and semiconductor equipment, and media and services, Butters sees tech leaders such as Nvidia, Broadcom, Alphabet, and Meta continuing to deliver solid financial results.
Alejandro Zambrano, chief market strategist at ThinkMarkets, provides further insights into the factors driving analysts’ bullish forecasts for the fourth quarter.
“The anticipated doubling of the S&P 500’s earnings growth rate in Q4 2024 is primarily attributed to base effects, notably within the banking sector,” he told The Epoch Times via email.
“Banks, previously impacted by FDIC charges, are now benefiting from higher interest rates, boosting their earnings. Additionally, companies like NVIDIA in the semiconductor industry are experiencing significant demand for AI and cloud computing chips, driving robust growth. In their Q3 2024 earnings report, the firm reported a 94% year-over-year revenue increase to $35.1 billion.”
David Materazzi, CEO of automated trading platform Galileo FX, sees several positive developments for equity markets as fiscal 2024 ends.
“Tech is leading thanks to AI and semiconductors. These industries are pushing innovation, meeting demand, and expanding their reach,” he told The Epoch Times.
“Consumer spending is steady because wages are higher, and unemployment remains low. The economy shows strength as companies adapt to challenges. Businesses have focused on reducing costs, which helps increase profits.”
Jason Hishmeh, an investor, entrepreneur, and technical leader, also sees a bright path ahead for S&P 500 companies.
“It becomes evident that the anticipated earnings growth in Q4 is not merely a coincidence,” he told The Epoch Times in an email.
“It is an outcome of companies, particularly those operating in the technology, consumer goods, and energy industries, intensifying their focus on innovation and productivity.”
He pointed to the energy and health care sectors, which are expected to contribute significantly to fourth-quarter earnings growth.
“In the energy field, the shift toward renewable energy sources generates novel opportunities alongside the conventional oil and gas industries,” he said.
“In the meantime, the health care sector, particularly pharmaceuticals and biotechnology, is consistently gaining advantages from robust product pipelines and increasing worldwide need for medical advancements.
“Whether you are a startup or a Fortune 500 company, the essential factor for achieving sustained success lies in maintaining adaptability and consistently striving for innovation.”

en_USEnglish