Business

S&P 500 Profit Margins Hit a Record 14.8% and Wall Street Is Using It as a Security Blanket

Corporate Efficiency
By Daniel Schoester
Market Profit Margins

Wall Street wrapped its best quarter in six years, with chipmakers extending their rally to fresh highs. Our latest Bear and Bull survey found 58.2% of readers feeling bullish heading into July, even as fresh data points to a resilient economy. Confidence is holding up, but caution hasn't gone away.

  • The S&P 500 climbed in eight of the past 12 months, yet the index declined 1.1% in June — while the Nasdaq 100 declined 0.8% over the same stretch.
  • That decline came despite net profit margins for S&P 500 companies surging to a record 14.8% in Q1 — the highest level FactSet has tracked since 2009.

Forward-looking: Wall Street's confidence comes with paperwork. JPMorgan's credit card data shows consumer spending holding up, even as it flags a more value-conscious, bifurcated shopper beneath the surface. That resilience helped push the firm to raise its 2026 EPS estimate to $350, a 29% jump from last year, and its year-end S&P 500 target to $7.8K. Still, JPMorgan isn't ignoring the warning lights, cautioning that speculative momentum trading in secondary AI stocks carries a real risk of a flash crash. If that happens, the bank says BTFD.

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