Q1 2026 Earnings Season: What Investors Should Watch

Q1 2026 earnings season officially begins this week, and the backdrop is anything but ordinary. The S&P 500 is down roughly 4.3% year to date. The VIX sits near 23.87. Oil is above $115 a barrel. And the Iran conflict plus ongoing tariff uncertainty are clouding the forward outlook for nearly every sector.

Against that noise, companies are expected to deliver solid profit growth. The question is whether guidance holds up under pressure.

What Are Analysts Expecting for Q1 Earnings?

The FactSet consensus calls for 13.2% year-over-year earnings growth across the S&P 500, up slightly from the 12.8% estimate at the start of the year. Total estimated earnings for the quarter have risen to $629.3 billion from $627 billion since December 31.

If that number holds, it will mark the sixth consecutive quarter of double-digit earnings growth for the index. Revenue growth is projected at 9.7%.

On the guidance front, 59 S&P 500 companies have issued positive EPS guidance for Q1, while 51 have issued negative guidance, according to FactSet’s Earnings Insight. That positive-to-negative ratio is narrower than usual, reflecting the uncertainty baked into the current macro environment.

Which Sectors Will Lead and Which Will Lag?

Nine of eleven S&P 500 sectors are projected to report year-over-year earnings growth. The spread between winners and losers is wide this quarter.

Sector	Expected YoY Earnings Growth	Notes
Information Technology	+45.1%	Highest growth; 33 companies issued positive guidance
Materials	+24.6%	Strong commodity pricing support
Financials	Positive (moderate)	M&A rebound, fee income strength
Energy	+8.6% revision higher	Oil windfall, largest upward revision since Dec 31
Industrials	Positive	Mixed; tariff drag on some manufacturers
Consumer Staples	Positive	Defensive positioning in volatile market
Utilities	Flat to slight growth	Stable margins, limited upside
Communication Services	Positive	Ad spending and streaming gains
Real Estate	Positive	Rate stabilization benefit
Health Care	Decline expected	ACA credit expiration, PBM margin pressure
Consumer Discretionary	Decline expected	Downward EPS revisions, tariff costs

Information Technology stands out at +45.1% expected growth, driven by continued AI spending and cloud infrastructure demand. The Energy sector has seen the largest upward revision (+8.6%) in dollar-level earnings since December 31, reflecting the March oil shock that pushed crude above $120 per barrel before settling near current levels.

Health Care and Consumer Discretionary are the two sectors expected to report year-over-year declines. For health care, the expiration of enhanced ACA tax credits and new flat-fee PBM models are compressing margins. Consumer discretionary companies face the double hit of tariff costs and softening demand.

Who Reports This Week?

The first wave of Q1 results arrives this week with a mix of airlines, consumer brands, and tech names.

Wednesday, April 8:

• Delta Air Lines (DAL) reports before market open
• Constellation Brands (STZ) reports fiscal Q4 results
• Applied Digital (APLD) reports fiscal Q3 after the close

Later in the week: Additional mid-cap and sector-specific reports fill out the calendar before the main event: big bank earnings starting April 13.

Can Delta Air Lines Deliver With Oil Above $115?

Delta is the first major airline to report this quarter, and the market will treat it as a read-through for the entire travel and leisure sector. Analysts expect EPS of roughly $0.58 to $0.62 on revenue near $14.9 billion, representing about 7.5% year-over-year revenue growth.

There is reason for cautious optimism. Delta’s management raised its Q1 revenue growth outlook in mid-March from a range of 5% to 7% to 7% to 9%, though it kept EPS guidance within its original range of $0.50 to $0.90.

The elephant in the room is jet fuel. With Brent crude averaging $103 per barrel in March and WTI now above $115, fuel costs are a direct margin headwind. A 30% increase in oil prices could reduce S&P 500 earnings by as much as 4%, with the heaviest impact on transportation and industrial companies. Delta will need to show that premium pricing power and capacity discipline are offsetting that pressure.

Full-year 2026 estimates call for $6.80 EPS, a 16.8% year-over-year increase, though that number has been revised 5.6% lower over the past 60 days.

What Will Bank Earnings Tell Us About the Economy?

The real tone-setter arrives the week of April 14, when the largest U.S. banks report in rapid succession.

Bank	Report Date	Consensus EPS Estimate
Goldman Sachs (GS)	April 13	$15.62 to $15.94
JPMorgan Chase (JPM)	April 14	$5.32 to $5.50
Wells Fargo (WFC)	April 14	TBD
Citigroup (C)	April 14	TBD
Morgan Stanley (MS)	Week of April 14	TBD

JPMorgan is expected to report EPS of $5.32 to $5.50, roughly a 7% year-over-year increase. The focus will be on net interest income trajectory, credit quality trends, and any commentary on the integration of the Apple Card portfolio.

Goldman Sachs analysts expect EPS between $15.62 and $15.94, a significant jump driven by the equity capital markets desk and a strong IPO pipeline. M&A advisory revenue is also expected to be robust. Deal activity is off to a record start in Q1 2026, supported by lower interest rates, pent-up demand, and AI-driven acquisitions.

Morgan Stanley received a timely upgrade to “buy” from UBS on Monday, with a $196 price target implying roughly 18% upside. UBS analyst Erika Najarian noted the stock’s recent pullback reflects “cyclical rather than structural decline” and pointed to wealth management strength and advisory momentum as catalysts.

The April 14 lineup of JPMorgan, Wells Fargo, and Citigroup all reporting on the same day creates what analysts have called a “super Tuesday” for the financial sector. Credit loss provisions and loan demand commentary will be closely watched as indicators of broader economic health.

How Are Oil Prices and Tariffs Affecting Earnings?

Two forces are working against profit margins this quarter: energy costs and trade policy.

Oil above $115/barrel is compressing margins across transportation, manufacturing, and consumer sectors. Historical data shows that when oil rises 30% or more year over year, manufacturer operating margins decline by a median of 100 basis points on a two-quarter lag. For increases above 40%, the margin hit widens to over 120 basis points. If oil remains above $100 per barrel for multiple quarters, headline inflation could increase by approximately 80 basis points, creating a feedback loop that pressures both corporate costs and consumer spending.

Tariff headwinds are harder to quantify because many companies have stopped trying. Constellation Brands estimated a $20 million hit to fiscal 2026 earnings from aluminum tariffs. Procter & Gamble reported a $1 billion annual tariff impact, calling it a 5-point headwind to core EPS growth. As our one-year tariff review detailed, many large caps now exclude tariff impacts from guidance altogether because the policy path remains unpredictable.

The combination of energy cost inflation and tariff uncertainty will make forward guidance the most important part of every earnings call this season.

What Does Valuation Look Like Heading Into Earnings?

The S&P 500 trades at a forward 12-month P/E of 19.8, according to FactSet. That is below the five-year average of 19.9 but above the 10-year average of 18.9.

That valuation is not stretched by recent standards, but it assumes the current earnings growth trajectory holds. If tariff escalation, oil prices, or geopolitical shocks force a meaningful round of estimate cuts, the multiple could look less comfortable in a hurry. As noted in our weekly recap, the market has been repricing risk lower since February.

For full-year 2026, analysts are calling for 17.4% earnings growth, with acceleration expected in the back half: 19.1% in Q2, 21.2% in Q3, and 19.3% in Q4.

How Often Do Companies Beat Estimates?

Historically, about 77% of S&P 500 companies beat EPS estimates in a typical quarter, though the five-year average has been closer to 77% and the ten-year average sits at 74%. Last quarter, 77% of companies cleared the bar on earnings, while only 59% beat revenue expectations, well below the five-year average of 69%.

The revenue miss rate is worth monitoring this quarter. If oil and tariff costs are eating into top-line growth more than expected, even companies that beat on EPS through cost management may give cautious forward views.

The Bottom Line

Q1 2026 earnings season starts with consensus expectations for 13.2% profit growth, a healthy number on its own. But the quality of that growth matters more than the headline. With oil above $115, tariff costs mounting, and geopolitical risk elevated, guidance commentary will carry more weight than the backward-looking results.

This week, Delta Air Lines will set the tone for how companies are absorbing energy cost inflation. Next week, the major banks will tell us whether the M&A recovery is real and whether credit conditions are still holding together. The data from these two weeks will shape market direction for the rest of April.

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