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Wall Street’s forecast is for S&P 500 earnings to keep growing in 2027, but at a slower pace: LSEG IBES consensus estimates reported by Reuters put growth at 35% in 2026 and 15% in 2027. That is a 20-percentage-point slowdown in the growth rate—not a forecast that total earnings will fall. Reuters said the 15% estimate is also above the 10% median annualized growth rate over the past 35 years cited by Barclays equity strategists.

What the 35% and 15% forecasts mean

The figures compare expected year-over-year earnings growth for two different years. Reuters’ October 1, 2026 analysis attributed them to LSEG IBES estimates; they are forecasts, not reported S&P 500 results. Reuters described the 35% expectation for 2026 as the highest growth rate since 2021, when a post-pandemic rebound affected the comparison.

Forecast year Expected S&P 500 earnings growth What the figure represents
2026 35% LSEG IBES consensus estimate reported by Reuters on October 1, 2026; not actual results.
2027 15% LSEG IBES consensus estimate reported by Reuters on October 1, 2026; not actual results.

The headline’s word “collapse” describes the sharp deceleration from an unusually strong forecast year. It should not be read as a 20% drop in earnings: the expected growth rate is 20 percentage points lower, while the 2027 estimate still implies earnings would rise. Nor is 15% weak by the historical comparison Reuters cited: Barclays strategists put the median annualized growth rate over the prior 35 years at 10%.

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Why analysts expect growth to slow

A harder comparison after a strong year

When earnings rise rapidly in one year, matching that growth rate the next year requires a larger increase in dollars. Reuters reported that investors are wary of difficult year-over-year comparisons after the expected strength in 2026. Walter Todd, chief investment officer at Greenwood Capital, put it this way: “We’ve had great earnings. The bad thing is the comparisons are going to be very difficult next year.”

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Cooling growth in AI capital spending

Reuters also linked the expected deceleration to slower growth in AI-related capital spending. That is an explanation reported by the news outlet, not proof that AI investment alone determines the earnings of every S&P 500 company. Spending plans and analyst estimates can change, and the available reporting does not establish a specific revenue effect for each supplier or index constituent.

Investors are asking whether the earnings boom is peaking

Reuters reported that Barclays strategists said some investors question whether earnings growth will peak in 2026. Michael Arone of State Street Investment Management said: “I do think that the rate of earnings growth will slow. I think the question will be: by how much?” The uncertainty is about the scale of the slowdown; the 15% figure remains a consensus estimate, not a settled outcome.

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Slower earnings growth does not determine the S&P 500’s direction

Earnings growth and index-price performance are related, but they are not the same measure. A slower increase in corporate profits does not by itself tell you whether the S&P 500 will rise or fall. Investors also consider the price they are paying for those earnings, interest rates, and expectations for future growth; Reuters reported valuation concerns alongside questions about whether profit growth is peaking.

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Valuation figures should be kept tied to their reporting snapshots. Reuters’ October 1, 2026 analysis said the S&P 500’s forward price-to-earnings ratio was 19.2, down from 22 at the start of 2026 and a peak of 23.5 in October 2025. A separate October 3, 2026 article rounded the current ratio to 19. These are reported snapshots, not guarantees about future market returns.

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How to read the forecast responsibly

  • Read it as a forecast, not an earnings result. The 35% and 15% rates are LSEG IBES consensus estimates reported by Reuters, and can change as company results and analyst projections evolve.
  • Distinguish a slower rate from a decline. Moving from 35% growth to 15% growth means profits are forecast to rise more slowly, not shrink.
  • Keep the historical comparison in view. The 2027 estimate is below the unusually strong 2026 forecast but above the 10% median annualized growth figure Reuters attributed to Barclays strategists for the past 35 years.
  • Do not treat one explanation as the whole story. Difficult comparisons and slower AI capital-spending growth are factors cited in reporting, not a complete or quantified account of every company’s earnings.
  • Separate profit forecasts from market-price calls. Earnings estimates alone do not establish whether the index is undervalued, overvalued, or headed in a particular direction.
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Sources and scope

The central forecast and explanations come from Reuters’ October 1, 2026 analysis, “ANALYSIS-Investors wary of slowdown in US corporate profit boom,” republished by LSE Financial News: read the Reuters report. The October 3, 2026 article discussing the headline and additional market context is available from 24/7 Wall St. The available reports do not establish the underlying live LSEG estimate dataset, its exact calculation method, or a constituent-by-constituent breakdown, so the percentages are best treated as attributed consensus estimates rather than independently verified outcomes.

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