S&P 500 earnings growth heavily reliant on tech giants' 26% surge

The growth in S&P 500 earnings appears modest without the remarkable 26% surge contributed by the 'Magnificent Seven' tech giants. As of early August 2025, nearly two-thirds of the earnings reporting season is complete, revealing that the impressive overall earnings growth is predominantly driven by these seven companies. Goldman Sachs' U.S. equity strategist, David Kostin, reported that the combined year-over-year earnings increase for this group in the second quarter stands at 26%, factoring in estimates for Nvidia, which will release its results later in the month. The remaining members—Meta Platforms, Amazon, Tesla, Alphabet, Microsoft, and Apple—have already reported their earnings, but the rest of the S&P 500 is underperforming, with aggregate growth at only 4%. This disparity underscores the significant influence of these mega-cap tech stocks, which continue to show resilience despite challenges like rising tariffs and fluctuating employment data. Since April 2, six of the 'Mag 7'—excluding Apple—have seen their share prices rise, contributing to the S&P 500's recovery from near bear-market levels to record highs. However, such heavy concentration poses risks; if some of the...