Don’t get FOMO fever. This market isn’t going to run away yet. It more than likely will get worse again before it’s recovered. Inside the numbers tell the story.
S&P 500 Q1 2025 Earnings (as of May 2, 2025)
Companies Reporting & EPS Surprises: By May 2, roughly 72% of the S&P 500 had reported Q1 results—about 360 of 500 companies. Of those reporters, about 76% beat EPS estimates. (This translates to roughly 274 firms beating and 86 missing.) In aggregate, companies are reporting EPS about 8.6% above estimates. This beat rate is slightly below the recent 5-year norm (77%) but above the 10-year average (75%), and the surprise magnitude (+8.6%) comfortably exceeds its 10-year average (~6.9%).
Guidance Trends: Guidance has been weak. As of May 2, only 61 S&P 500 firms have issued Q2 EPS guidance, of which 35 warned of lower earnings (negative guidance) and 26 issued positive guidance. Equivalently, 35 companies lowered guidance (or issued caution) for Q2, while 26 raised it. The remaining ~439 firms (the rest of the index) gave no guidance for Q2 (essentially all other companies in the index, since 500–61=439).
| Category | S&P 500 (as of May 2) |
| Companies reporting Q1 results | ~360 (72% of S&P 500) |
| Beat EPS estimates | ~274 (~76% of reporters) |
| Issued negative Q2 guidance | 35 companies |
| Issued positive Q2 guidance | 26 companies |
| No forward guidance (Q2) | ~439 companies (remainder of index, 500–61) |
Currency (Dollar) Impact: A major tailwind for Q1 profits has been the weaker U.S. dollar. The dollar index fell to three-year lows (roughly a 5–9% decline from late 2024 into Q1). Morgan Stanley notes that the roughly 5% dollar drop since January “should offer a tailwind for U.S. [earnings] revisions.” In practice, many multinationals are seeing modest FX boosts—for example, Meta’s management said currency adds about a 1% tailwind to year-over-year revenue growth. Roughly 40–50% of S&P 500 revenues come from overseas (one estimate cites ~41%), so a ~9% weaker dollar can translate into a 2–4% uplift in reported EPS for large global companies. In sum, analysts estimate that currency effects contributed a few percentage points of upside to Q1 S&P earnings growth. (By contrast, when the dollar strengthens, it can shave that much off earnings.)
’Magnificent 7’ Tech Stocks Contribution: The “Magnificent 7” (big U.S. tech names like Apple, Microsoft, NVIDIA, Amazon, etc.) continue to dominate earnings growth. According to FactSet, the Magnificent 7 are expected to grow Q1 EPS by about +14.8% year-over-year, whereas the other 493 S&P companies combined are only ~+5.1%. In other words, with the Magnificent 7 included, the index’s blended EPS growth is ~12.8% (the reported figure), but without them it would be roughly ~5%. This huge gap means the tech giants account for most of the index’s profit growth. Indeed, two of the Magnificent 7 (NVIDIA and Amazon) rank among the top five contributors to Q1 earnings growth. (By contrast, typical S&P companies outside tech have much lower growth rates.)
| Group | Q1 2025 EPS Growth (YoY) |
| Magnificent 7 (7 large-cap techs) | +14.8% (projected) |
| All other S&P 500 companies | +5.1% (projected) |
Historical Context: The current earnings season has been stronger than long-term norms. As noted, ~76% beat estimates, compared with an average of 75% over the past 10 years (and 77% over the past 5 years). Likewise, the average EPS surprise (+8.6%) is well above the 10-year norm (+6.9%). In short, earnings beats and surprise magnitudes are slightly above their 10-year averages. If this pace holds (and 72% of companies have reported), Q1 2025 will mark the second straight quarter of double-digit S&P earnings growth (~12.8% y/y).
FactSet’s Q1 2025 Earnings Scorecard (May 2, 2025) provides company counts, beat rates, guidance stats, and growth figures. FactSet research also details the Magnificent 7’s outsized impact. Morgan Stanley commentary (cited via Investing.com) notes the dollar’s ~5% drop as a tailwind. Meta’s earnings call confirms a +1% FX boost to Q2 revenue growth. All data are current through May 2, 2025.
Summary TLDR:
On the surface, earnings have been solid but far from spectacular. Roughly 40% of multinational profits come from overseas, and this quarter they’ve gotten a nice lift from the weaker U.S. dollar, which inflates earnings when converted back to dollars. But let’s not be fooled by the headline numbers.
Out of 360 companies that have reported so far, the so-called “Magnificent Seven” accounted for a staggering 14.8% of total earnings growth. The other 353 companies? Just 5.1% combined. That’s not broad strength—that’s narrow leadership.
And guidance? It’s a mess. Only 35 companies raised guidance. Twenty-six cut it. But here’s the kicker: an eye-popping 439 companies gave no guidance at all. That’s not caution—that’s uncertainty off the charts.
This is exactly why I’m calling this what it is: a rally in a bear market. It doesn’t smell like smart money is piling in. This looks like a retail-driven bounce, not a shift in fundamentals. If you’ve made some gains, good. Take something off the table. This isn’t the time to chase momentum.
There will be a great buying opportunity—but this isn’t it. After eight straight days of gains, don’t let FOMO take the wheel. That fever might feel good for a minute, but trust me—it gets ugly fast… Remember… I told you so.