Q4 2025 Earnings Preview: Can Corporate Profits Sustain S&P 500 Record Highs?

• Earnings season gets underway this week, with reports from major banks providing the first look at corporate performance

• The technology sector is expected to be the standout performer with over 25% projected earnings growth, driven by the ongoing "AI arms race"

• Sectors that rely on lower-end consumer spending are expected to be squeezed again by "value-conscious" shoppers, making the consumer discretionary sector a laggard this season

The Q4 2025 earnings season for US corporations begins this week when big banks kick things off, starting with JPMorgan Chase on Tuesday (Jan 13). With the benchmark S&P 500® closing at 6,966 on Friday due to stable jobs data, above its previous record high close of 6,944, investors will be looking at corporate earnings to assess whether the market's momentum can continue in the new year.

Earnings growth in 2025 highlighted, once again, the resilience of the US economy, corporations and consumers. The Fed's aggressive rate hikes in 2022 weren't enough to dismantle markets in 2023 or 2024, just as the April 2025 trade shock wasn't enough to derail US corporations last year. Despite thinking US companies would take on massive cost cutting plans to offset higher tariffs, they were able, for the most part, to pivot production, renegotiate with suppliers, and pass costs onto consumers, leading to continued profit growth for the year.

Next week we'll not only hear from US corporations as they wrap up 2025 with their Q4 results, but get their much-anticipated outlooks for 2026.

What to Expect from Q4 Reports

The current consensus for Q4 S&P 500 EPS growth stands at 8.3% according to FactSet. This would be the 10th consecutive quarter of growth for the index. Revenues are expected to have grown 7.7% YoY, the 21st consecutive quarter of growth, and the second-strongest figure in three years.

Eight of the 11 S&P sectors are anticipated to post YoY gains, with Information Technology (25.9%), Materials (9.0%) and Financials (6.4%) leading the pack. Only Industrials (-0.5%), Energy (-1.7%) and Consumer Discretionary (-3.5%) are expected to post negative growth.¹

Overall, 2025 EPS growth is expected to come in at 12.4%. For 2026 that figure is anticipated to improve to 14.9%.²

Big Banks Poised for Another Strong Showing

Financials are expected to be one of the leading sectors this season, as the environment for banks remains positive. Here is what investors should be looking for across the "Big Six" (JPM, MS, C, BAC, WFC, GS):

1. Dealmaking

The biggest story of Q4 2025 is the revival of Wall Street fees. Global M&A volume hit roughly $5 trillion in 2025, a massive 40%+ jump from the previous year.³ Wall Street Horizon tracked 473 M&A announcements in 2025, the highest amount since 2021. IPO announcements of 481 also hit a four year high.

What to watch: Investment banking fees, especially from GS and MS. If they beat estimates here, it suggests the IPO and merger market is more-or-less thawed for 2026.

2. The Net Interest Income (NII) Pivot

With the Federal Reserve having cut rates to the 3.50%–3.75% range in late 2025, the easy money from high interest rates is over.

What to watch: Specifically look for JPM and BAC management's guidance on NII. Investors want to see if loan growth (more people taking out mortgages/business loans at lower rates) is enough to offset the lower profit margins on those loans.

3. Regulatory Green Shoots

Following the 2024 election and recent shifts in D.C., the market is pricing in a lighter regulatory touch.

What to watch: Listen for mentions of Capital Requirements. If CEOs hint that they need to hold less capital, it means one thing: massive share buybacks and dividend hikes coming in 2026.

4. Consumer Health

Despite sticky prices and a softening labor market, the US consumer has continued to hang in there. Investors will be looking for signs on big bank calls that this can continue in 2026.

What to watch: Credit card delinquency data, specifically from Bank of America, is the best indicator of US consumer health. If delinquencies stay below 3%, the soft landing could officially be a reality.

Q4 2025 Earnings Wave

The peak weeks of the Q4 earnings season are expected to fall between January 26 - February 27, with each week expected to see over 1,000 reports. Currently, February 26 is predicted to be the most active day with 855 companies anticipated to report. Thus far, only 36% of companies have confirmed their earnings date (out of our universe of 11,000+ global names). The remaining dates are estimated based on historical reporting data.

Source: Wall Street Horizon

1 FactSet Earnings Insight, John Butters, January 9, 2026, https://advantage.factset.com
2 FactSet Earnings Insight, John Butters, January 9, 2026, https://advantage.factset.com
3 "Global M&A stages great rebound in 2025 with $4.8 trillion deal value to mark second-highest total on record," Bain & Company, December 11, 2025, https://www.bain.com

Copyright © 2026 Wall Street Horizon, Inc. All rights reserved. Do not copy, distribute, sell or modify this document without Wall Street Horizon's prior written consent. This information is provided for information purposes only. Neither TMX Group Limited nor any of its affiliated companies guarantees the completeness of the information contained in this publication, and we are not responsible for any errors or omissions in or your use of, or reliance on, the information. This publication is not intended to provide legal, accounting, tax, investment, financial or other advice and should not be relied upon for such advice. The information provided is not an invitation to purchase securities, including any listed on Toronto Stock Exchange and/or TSX Venture Exchange. TMX Group and its affiliated companies do not endorse or recommend any securities referenced in this publication. This publication shall not constitute an offer to sell or the solicitation of an offer to buy, nor may there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. TMX, the TMX design, TMX Group, Toronto Stock Exchange, TSX, and TSX Venture Exchange are the trademarks of TSX Inc. and are used under license. Wall Street Horizon is the trademark of Wall Street Horizon, Inc. All other trademarks used in this publication are the property of their respective owners.