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October 12, 2025Cryptopolitan logoCryptopolitan

With S&P 500 up 11% YTD, investors demand big Q3 results from Corporate America

The S&P 500 has rallied 11% year-to-date, and Wall Street is officially out of ￰0￱ the third-quarter earnings season begins, traders expect Corporate America to prove that the rally is ￰1￱ to Bloomberg Intelligence, analysts are projecting 7.4% profit growth for ￰2￱ this quarter, up slightly since mid-August, while the MSCI All-Country World Index is also heading toward an all-time ￰3￱ surge, driven by the AI investment boom, has inflated valuations and expectations ￰4￱ that optimism is running into ￰5￱ S&P 500 has soared 32% from its April low, yet tensions over tariffs, worries about a tech bubble, and a still-fractured global trade system are weighing on ￰6￱ Stovall, chief investment strategist at CFRA, said: “Investors will be very unforgiving of any kind of slip, whether it’s a slip in earnings or a slip of the tongue when talking about expectations.” The pressure now shifts to the nation’s biggest players as JPMorgan Chase & ￰7￱ other top banks kick off results next week, followed later by the megacap tech giants whose gains have powered most of this rally.

Trump’s tariffs hammer stock profits – Investors demand clarity from companies Trade is once again the story of the ￰8￱ Donald Trump announced plans for a new 100% tariff on Chinese goods, plus export controls on “any and all critical software,” to begin November ￰9￱ decision hit markets immediately, with analysts warning that months of elevated tariffs are already cutting into corporate ￰10￱ Bank AG estimates that S&P 500 earnings growth would have been about one percentage point higher this quarter without those ￰11￱ exporters, who shipped $1.3 trillion in goods to the ￰12￱ year, have so far weathered the hikes, though many fund managers think that’s due to front-loaded exports before tariffs fully take ￰13￱ Europe, earnings expectations are already being trimmed.

A Citigroup index shows estimates have been falling steadily since mid-March, lowering the bar for upcoming ￰14￱ the same time, the AI spending boom hasn’t ￰15￱ forecasts a 67% jump in global capital expenditures this year to $375 billion, with Societe Generale noting that the capex-to-sales ratio is at a 25-year ￰16￱ any hint of a slowdown could shake investor ￰17￱ O’Rourke, chief market strategist at JonesTrading, said , “A slowdown would be like slamming on the brakes. A lot of names would enter a real profit-taking mode.” Layoffs, currency swings, and China’s weak growth add pressure With the federal government shutdown blocking new employment data, investors are watching earnings calls for signs of workforce ￰18￱ Mayfield, strategist at Robert ￰19￱ & Co., warned that layoffs could expose deeper weakness in the labor market and weigh on consumer spending.

“If you see enough of those start to stack up,” he said, “it’s a signal the labor market is weaker than expected.” Currency trends are also shaping Q3 ￰20￱ ￰21￱ rallied against major currencies but remains well below its 2022 peak. That’s a relief for exporters and multinationals converting foreign income into ￰22￱ Buchbinder, chief equity strategist at LPL Financial, said the softer dollar, along with AI-driven capital investment, could add “another 5–7% upside” to profit forecasts and lift earnings at a low-teens pace this ￰23￱ Europe, the stronger euro remains a ￰24￱ Cruz, strategist at Panmure Liberum, said the recent dip came too late to benefit Q3 reports, especially for construction, healthcare, and technology firms that generate nearly 60% of sales abroad.

Meanwhile, China’s CSI 300 index is up 17% this year, but its Q3 profit outlook is flat, with just 3% growth ￰25￱ upcoming meeting between Trump and Xi Jinping is now uncertain, as both countries tighten restrictions on tech and material flows. Still, there’s a glimmer of ￰26￱ Sachs believes China’s corporate downgrades are slowing as factory activity and industrial profits ￰27￱ analysts also pointed to Beijing’s efforts to tackle involution, the destructive domestic price wars that have plagued ￰28￱ you're reading this, you’re already ￰29￱ there with our newsletter .

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