Victoria Bazir
US corporate earnings are showing real strength again. After years of choppy post-pandemic results, profits are accelerating across the board, with broader sector participation and healthier revenue trends. Recent data from Deutsche Bank reveals that S&P 500 quarterly earnings growth has hit its highest level since 2021, marking one of the strongest readings in over a decade.
Earnings Growth Hits +18% YoY in Q3 2025
S&P 500 quarterly earnings grew 18% year-over-year in Q3—the best performance since Q3 2021. If you exclude the unusual post-pandemic bounce, this is actually the strongest expansion since 2018.
The chart shows a clear upward move on the right side, with a red arrow highlighting the renewed acceleration. Growth has been climbing steadily throughout 2024 and into 2025, and this latest jump confirms the trend is gaining momentum.
Broader Market Participation Drives the Rally
Six out of eleven S&P 500 sectors posted positive average EPS growth in Q3, a big improvement from just two sectors in Q2. That wider participation matters because it shows the earnings rebound isn't just coming from a handful of mega-cap tech names anymore. It's spreading out. Meanwhile, median profit growth across the Russell 3000 climbed to 11% YoY—the strongest since Q3 2021 and nearly double the previous quarter's 6%. Even smaller and mid-sized companies are seeing better results.
The chart tells the story clearly: a long stretch of weak growth after 2022, a gradual recovery through 2023 and 2024, then a visible jump in 2025. This kind of reacceleration usually goes hand-in-hand with stronger equity performance and more willingness from investors to take on risk. In fact, the frequency of earnings beats is now among the highest on record, which historically signals continued market strength.
What's Next
The return of solid earnings growth gives US stocks a firmer foundation to stand on. With profit momentum building across multiple sectors and market-cap ranges, equities could stay supported even if rates remain elevated. The real question now is whether this pace can hold through Q4 2025 and into early 2026. For now, though, the message is clear: US corporate earnings aren't just stabilizing—they're strengthening.
Victoria Bazir
