Let's get it started (earnings season, that is).

We’re through the quiet period of the pre-earnings season (that was not so quiet this time around with a conflict in the Middle East) and we’re about to get into full earnings season swing. 15% of S&P companies are reporting next week, while the following week (April 27-May 1) is the peak with 45% of them reporting. Here’s a look at what is expected.

Earnings expectations have moved higher over the last month or so. Not only for Q2, but also for all of 2026.

And expectations are everything in earnings (and actually a lot of things in life). Rising expectations raise the bar, and (in some cases) makes actual earnings look less good. After all, going back to 2012, the average annual earnings growth was 8.25%, compared to the estimate of 18% for 2026.

The details behind the move up is also worth looking at—it’s concentrated in a few sectors and names. 

• The energy sector saw the largest upgrades—with Occidental Petroleum and Valero Energy moving up the most—thanks to higher oil prices. 

• The 2nd biggest upgrade was in semiconductors with the biggest moves up in Micron and Teradyne. The demand for their products is real, but like anything, you have to maintain awareness for what expectations are already included. 

• The biggest downgrades include dropping airline growth estimates, likely due to higher oil prices, and paper/packaging companies also had lower earnings estimates.

A couple other things to note: 

• Once earnings are reported, a company can start their buybacks again. This has so far been a support in 2026, with Citadel reporting $428B already authorized. 

• Volatility has decreased recently, with the VIX Index at a high of 31 on March 27 to about 18 today. That means the cost of volatility and hedges has dropped as well. 

Understanding expectations can help you anticipate how a stock price might react to an earnings report. Oh and know when they are reporting.