At the “margin,” US companies have never been more profitable. That’s a key reason the stock market keeps powering ahead!
Check out MoneyShow Chart of the Day, which comes courtesy of FactSet. It shows the blended net profit margin for companies in the S&P 500 Index (^SPX) that have reported first-quarter results already. It’s currently at 13.4%. If that holds through the end of the Q1 earnings season, it’ll be the highest on record (the data goes back to 2009).
S&P Profit Margins are Hitting New Highs
It’s not a one-off anomaly, either. Profit margins have been climbing consistently since the end of 2023.
Information technology companies are reporting the biggest year-over-year margin expansion for Q1 – to 29.1% from 25.4% in Q1 2025. But four other sectors are also seeing margins climb, including financials and utilities. Analysts see S&P 500 margins expanding further to 14.6% by year end.
So, if you’re wondering why stocks can hold up – in the face of lousy consumer sentiment or lingering war worries – just remember that on Wall Street, it’s all about profits. And right now, things look pretty good on that score.
