Insights 
VT 
In the second quarter, earnings are projected to rise by 5% compared to the previous year, driven by a 3.9% increase in revenues. This marks the slowest growth since the 4.3% rise in the third quarter of 2023.
The 2025 Q2 earnings estimates are declining, seeing substantial reductions across 14 of 16 Zacks sectors, except Aerospace and Utilities, which saw an increase. Tech and Finance sectors, crucial for the S&P 500 index with over 50% of earnings, have also faced estimate cuts, though the Tech sector has seen recent stabilisation.
Easing Tariff Uncertainties
Easing tariff uncertainties have contributed to the stabilisation in Tech revisions. Analysts had initially lowered estimates following punitive tariff announcements, but expectations for such tariffs to be enforced have since lessened.
For 2025 and 2026, S&P 500 index earnings are projected at $253.84 and $286.87, respectively. Notable companies reporting this week include FedEx, Nike, and Micron. FedEx, reporting on June 24th, anticipates earning $5.94 per share on $21.7 billion in revenues. Nike, reporting on June 26th, is expected to see a decline in EPS by 89.1% and revenues by 15.4%.
Micron anticipates $1.57 per share in earnings on $8.81 billion in revenues, reflecting substantial growth. Nine S&P 500 members have reported fiscal May-quarter results, showing 2.4% earnings growth and 7.9% revenue gains.
Despite a projected 5% rise in second-quarter earnings compared to the same period last year, the pace of growth has clearly slowed. A 3.9% increase in revenues underpins this trend, making it the slowest quarterly earnings expansion seen since Q3 of 2023. That slower pace reflects softening demand across various industries, as well as margin pressure that was more subdued in prior quarters.
Outlook revisions tell us rather plainly that confidence for next year is wavering. We’re now seeing downward adjustments for Q2 of 2025 across the board, with 14 out of 16 Zacks sectors receiving lower earnings estimates. This broad-based revision adds weight to the seriousness of the move—it’s not just a few sectors driving it. Finance and Technology, which together make up more than half of the total earnings within the S&P 500, are also facing net cuts. That said, Tech has steadied of late, aided by improved clarity around tariffs.
Earlier fears of wide-reaching tariff implementations, mainly targeting imports crucial to the semiconductor and device manufacturing chains, had led analysts to downgrade projections. But now that such trade actions appear less likely—or at least, delayed—that cloud has thinned. It’s a reminder that pricing in uncertainty often overshoots the likely impact. This rebound in sentiment isn’t driven by fundamentals improving quickly but more by the fading intensity of earlier concerns.
Looking Ahead to 2025 and 2026
Looking ahead, consensus sees full-year 2025 earnings for the S&P 500 at $253.84 per share, and then rising to $286.87 in 2026. These are decent figures, and yet the abruptness of the current estimates being downgraded indicates they could come under pressure again, especially if GDP expectations soften or inflation restarts its climb. For those of us watching price movement and implied volatility for shorter expiries, shifts in forward multiples during earnings season will be vital indicators. More names will surface in the coming two weeks, but even this week features companies influential enough to stir index-level moves.
FedEx reports on the 24th. The company is guiding towards $5.94 EPS on sales of $21.7 billion. This will give us an updated read not only on goods movement but also on broader industrial demand trends. Nike’s release two days later will provide clues about shifts in consumer discretionary spending, though its expected 89.1% EPS decline paired with a 15.4% fall in revenues offers a sobering contrast to the optimism reflected in broader market valuations. Whether that’s isolated or more systemic remains the question.
Micron appears to be on the other end of the spectrum. It projects earnings of $1.57 per share on nearly $8.81 billion in revenue. Both top- and bottom-line growth figures here stand out and align with the recent narrative of rising AI-related hardware spend.
Among companies that have already posted fiscal results for May, average earnings rose 2.4%, and revenues were up 7.9%. That’s modestly supportive, though hardly encouraging if hoping for robust second-half acceleration. Mixed results like these create shorter-term opportunities where conviction is limited, and positioning can move quickly off results and subsequent guidance shifts.
Overall, with headline growth slowing and forward guidance deteriorating in key sectors, we are seeing clearer pricing of risk, especially in the options market. Traders should focus on implied volatility skew around reporting dates and watch correlations between earnings beats/misses and price response. Unusually wide or narrow moves will offer clues about whether sentiment is fragile or simply waiting to be confirmed by hard data.
