S&P 500 Q3 2025 Earnings Surge: Magnificent 7 Lead Market Rally

The third-quarter earnings season begins its second busiest week, with 135 S&P 500 companies scheduled to report. Notable companies scheduled to release earnings include: Palantir (PLTR), Pfizer (PFE), Yum! Brands (YUM), Emerson Electric (EMR), McDonald’s (MCD), Humana (HUM), and Qualcomm (QCOM). Warren Buffett’s Berkshire Hathaway (BRK/A, BRK/B) reported better-than-expected earnings on Saturday. A deeper dive and insights into Berkshire Hathaway’s third-quarter earnings are here.

With 64% of companies reporting so far, 83% have beaten consensus earnings estimates. The earnings season preview from last week contains more details about the underlying drivers of earnings.

Earnings At A Glance

Combining actual results with consensus estimates for companies yet to report, the S&P 500’s blended earnings growth rate for the quarter is at 10.7% year-over-year, above the expectations of 7.9% at the end of the quarter. The expected earnings growth rates for calendar years 2025 and 2026 increased to 11.2% and 14.0%, respectively.

Market Performance

The continuation of the strong earnings season helped lift the S&P 500 last week. The Magnificent 7, consisting of Microsoft (MSFT), Meta Platforms (META), Amazon.com (AMZN), Apple (AAPL), NVIDIA (NVDA), Alphabet (GOOGL), and Tesla (TSLA), outperformed last week.

Magnificent 7

Because these companies are critical drivers of earnings growth and a significant percentage of the S&P 500’s market capitalization, the Magnificent 7 remained the group to watch this earnings season. Despite the disappointments from Tesla (TSLA) and Meta Platforms (META), the rest of the group picked up the slack. Alphabet (GOOGL), Microsoft (MSFT), and Amazon.com (AMZN) continued to support the thesis that demand for artificial intelligence (AI) is driving robust growth.

Meta Platforms (META) posted disappointing headline earnings due to a non-cash tax charge. More importantly, investors were spooked by the announcement of more than $100 billion in planned investments in AI next year. As a positive, third-quarter revenues grew 26% year over year, and their ad business continues to post impressive results, so the underlying business remains robust.

NVIDIA (NVDA), the last of the Magnificent 7 to report earnings, is scheduled to report on November 19.

Earnings Insights By Sector

According to FactSet data, the positive earnings surprises from companies in the information technology, consumer discretionary, and health care sectors were the most significant contributors to the S&P 500’s earnings growth rate increase last week. As detailed above, the communication services sector was the largest detractor due to Meta’s earnings miss.

Within technology, Microsoft (MSFT) and Apple (AAPL) were the most significant positive drivers. Amazon.com (AMZN) was the most crucial positive surprise in consumer discretionary, while Eli Lilly (LLY), Merck (MRK), and Gilead Sciences (GILD) were the most notable positive surprises in health care.

Revenue Results By Sector

Sales growth at 7.9% is running well above expectations. Three sectors are on pace for double-digit year-over-year sales growth this quarter: information technology, communication services, and health care.

What To Watch This Week

With the government shutdown continuing to drag on, US economic releases should remain relatively sparse. Importantly, the widely watched monthly jobs report is likely to be delayed by the government closure. Instead, the private ADP employment change release on Wednesday and the Challenger job-cut announcement report on Thursday will attract more attention than usual as investors and economists gauge the softness of the US labor market.

Third-quarter earnings reports will fill the void during the second busiest reporting week of the season. While a better-than-expected earnings season is all but assured, the individual company reports and any commentary about future earnings expectations remain crucial.

As widely anticipated, the Federal Reserve (Fed) delivered a 25 basis point (0.25%) rate cut at its meeting last Wednesday. Fed Chair Powell pushed back harder than expected against the market expectations of another cut at the December meeting, sending the odds to a little less than a 2-in-3 chance. The calendar is chock-full of Fed members speaking this week, so their comments will be closely monitored to gauge better the likelihood of a Fed easing in December.

Disclosure: Glenview Trust may hold the stocks mentioned in this article within its recommended investment strategies.