Spain’s credit rating upgraded to ’A+’ by S&P on strong growth
Investing.com -- The S&P 500 has recovered from the Liberation Day selloff and is now rising along the bottom of its robust uptrend channel, which has been in place for three years with an annual rate of +22.7%.
The index rebounded by early July, despite ongoing concerns about potential negative effects from tariffs. While many analysts had predicted an imminent slowdown in macroeconomic growth, this deceleration did not materialize in the second quarter of 2025, and trackers for Q3 continue to show above-trend growth rates.
Corporate earnings growth increased to 10% in Q2, consistent with typical growth patterns outside of recession periods. Companies have reported that the impact of tariffs has been modest so far and is expected to remain manageable.
Approximately half of the estimated direct impact of tariffs on inflation appears to have already occurred, while equity positioning remains supportive with discretionary investors maintaining neutral positions.
Based on these developments, S&P 500 earnings per share estimates for 2025 have been raised from $267 to $277, following better-than-expected Q2 earnings, company commentary on tariff impacts, improved macroeconomic growth forecasts, and a lower dollar. The 2026 EPS forecast stands at $315.
Equity valuations are expected to remain elevated compared to historical standards, driven by higher payout ratios, perceptions of stronger trend earnings growth, and greater earnings resilience with fewer significant drawdowns. The 10-year rates are running well above historical trend rates.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.