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Bank of America: S&P 500 Earnings Growth Expected to Slow, Analysts Warn of Limited Valuation Tolerance

On October 13, according to Jin10 news, Bank of America (BofA) has compiled data indicating that despite strong earnings expectations for the S&P 500 index in the third quarter, earnings growth is expected to slow in 10 out of 11 sectors compared to the previous quarter. Industry research shows that analysts anticipate the earnings growth rate for S&P 500 constituents to decrease from 25% in the third quarter and 28% in the fourth quarter of 2026 to 18% in the first half of 2027, indicating a slight weakening in the overall earnings outlook. Luca Paolini, Chief Strategist at Pictet Asset Management, noted that early signs suggest that the momentum for earnings growth may be peaking; given the high threshold for earnings growth expectations, even slightly disappointing results could trigger severe market reactions.

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