179 S&P 500 Companies Report Earnings This Week as Market Nerves Fray

By Nathan Brooks

Some 36% of S&P 500 companies — 179 in total — will report third-quarter results this week, according to FactSet, and Wall Street is in no mood to forgive anything short of a blowout. The index's heaviest hitters, Microsoft, Alphabet and Amazon, report Wednesday and Thursday, and together they carry nearly $11 trillion in market value.

That's the real story here. When three companies are worth that much, their numbers don't just move their own shares — they set the direction for the entire market.

How strong are profits supposed to be?

Analysts expect the S&P 500 to deliver 29.5% profit growth for the third quarter, per a FactSet report released Friday. On paper, that's spectacular. Roughly a quarter of index members have already reported, and 83% of them beat analysts' earnings-per-share estimates.

Yet the market isn't rewarding the beats the way it usually does. Jonathan Golub, chief investment strategist at Seaport Research Partners, said companies clearing estimates only narrowly are getting shunned by investors. "It's almost like a miss, because we kind of expect things to be coming in stronger," Golub said. "What's weird is you have these insane growth numbers."

Ken Mahoney, CEO of Mahoney Asset Management, put it more bluntly: the harsh reactions show that "expectations were through the roof and a lot was already priced in."

What does this change for investors?

The practical question: what happens if a mega-cap merely meets expectations? Based on the past month, the answer is selling. The S&P 500 is up 11.4% year to date but down 1.6% over the past month, dragged by worries over inflation, government deficits, a war with Iran that has pushed gas prices higher, and Big Tech's colossal AI build-out spending — sharpened by concerns about the debt being shouldered by CoreWeave and other AI players.

Luke Rahbari, CEO of Equity Armor Investments, called this week the most important of the earnings season and said the three tech giants would likely dictate the market's direction. "I think the bar is high for many companies, and with cautious to negative market sentiment, it could be a tricky week," Rahbari said.

There's a technical wrinkle worth watching, too. When Amazon and Alphabet last reported, one-time gains from AI investments produced abnormally large profit increases that lifted the S&P 500's overall earnings growth. Golub noted those past gains could make for bigger swings in this week's results — in either direction.

Beyond Big Tech

The week isn't only a tech story. UPS, Coca-Cola, Visa and Starbucks are among the key names reporting, and their numbers offer a cleaner read on the state of the real economy than the AI giants do.

Golub's underlying math is the part practitioners should hold onto. Strip out tech and energy — the latter's financials have benefited from higher oil prices — and the market is "otherwise pretty average. Not bad, just average." Earnings for the median S&P 500 company are expected to grow about 10%, he noted, "which is kind of very normal. So the weighted number distorts how good things are."

In other words, that 29.5% headline growth figure is a weighting illusion. For anyone positioning for the week, the asymmetry is the point: with sentiment cautious to negative and expectations fully priced, mega-cap surprises — even mild ones — will likely do more damage than equivalent beats do good.