Staff Reporter
Earnings growth for the S&P 500 in the fourth quarter of 2024 is projected to be the strongest since late 2021, according to a report from LSEG. This surge is driven by unexpectedly robust performances in the communication services, financials, and other key sectors.
As of Wednesday, nearly 70% of S&P 500 companies have reported their earnings, revealing an estimated increase of 15.1% compared to the same period last year. This marks a significant rise from the initial growth estimate of 9.6% at the beginning of January, based on LSEG’s compiled data.
Tajinder Dhillon, senior research analyst at LSEG Data & Analytics, noted that this fourth-quarter growth will be the highest quarterly earnings increase for the S&P 500 since the fourth quarter of 2021, which recorded a remarkable 32.1% growth during the recovery from the COVID-19 pandemic.
The S&P 500 communication services sector, which includes major players like Meta Platforms, is projected to post the highest year-over-year earnings growth for the fourth quarter at an impressive 32.2%.
Following closely are the financial sector, with estimated growth of 29.9%, and consumer discretionary, expected to rise by 24.8%, according to LSEG data.
“Earnings are holding up because the U.S. consumer is strong,” stated Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.
These robust earnings results are bolstering the stock market, even amid concerns that the Federal Reserve may delay interest rate cuts and uncertainties surrounding the impact of tariffs imposed during the Trump administration.
“In the end, the stock market revolves around those 500 companies in the S&P 500—their earnings, dividend policies, and growth trajectories. That is what truly defines a market,” Dollarhide emphasized.
