January 28, 2026: Earnings in the Driver’s Seat

A stock‑investor’s axiom holds that prices follow earnings—and that path has been bright in recent memory. Earnings for U.S. large‑cap companies have consistently outpaced investor expectations. For context, the average growth rate of U.S. large‑cap earnings over the past 20 years is about 7%. Throughout 2025, analysts predicted earnings would grow roughly two percentage points above that trend. Their expectations were directionally right but underestimated the magnitude.

In fact, earnings grew at an average rate of 12% over the first three quarters of 2025. That strength was a key driver behind the U.S. large‑cap stock market delivering a third consecutive year of strong results—up 18% in 2025 after back‑to‑back years with returns above 25%. This week’s Q4 2025 earnings reports will play a major role in determining whether that remarkable streak can continue.

Companies representing more than 30% of the S&P 500 Index’s market capitalization are set to report, including several that have contributed significantly to the index’s earnings momentum in recent quarters. With the market still priced near the top of its historical range—a forward price‑to‑earnings ratio of 23—the market’s near‑term trajectory arguably hinges on just a handful of these announcements.

Weekly Market Update: January 28, 2026