Goldman Forecasts Double-digit S&P 500 Earnings Growth in 2026

Stocks

Economic

Summary:

Solid U.S. growth and a weaker U.S. dollar, as well as artificial intelligence productivity gains, are anticipated to support an increase in S&P 500 earnings next year, according t...

Solid U.S. growth and a weaker U.S. dollar, as well as artificial intelligence productivity gains, are anticipated to support an increase in S&P 500 earnings next year, according to analysts at Goldman Sachs.

Stay ahead of every breaking move with real-time news, stock impact analysis, and Wall Street commentary on InvestingPro - get 55% off today.

In a note, the strategists including Ben Snider and Ryan Hammond predicted that profit per share in stocks in the benchmark index would rise by an annualized 12% in 2026 to $305.

Revenue is also tipped to grow by 7% next, with 70 basis points of profit margin expansion, the analysts added.

For 2027, meanwhile, S&P 500 income per share is tipped to rise a further 10% to $336.

Underpinning these forecasts are Goldman Sachs's predictions for accelerating gross domestic product growth in the U.S., along with a further softening in the dollar. The dollar index, which tracks the greenback against a basket of currency pairs, has slipped by more than 7% over the past one-year period.

"Beyond the macro drivers, the profitability of the largest stocks will continue to be a key driver of S&P 500 earnings growth," they argued, adding that returns from the seven largest stocks in the index -- Nvidia, Apple, Microsoft, Google, Amazon, Broadcom, and Meta -- account for roughly a quarter of its total earnings.

The Goldman Sachs analysts projected that these stocks will raise their collective earnings by 29% in 2026, similar to a pace set in 2025. These shares have been buoyed by hopes that massive investments in AI will eventually pay off for investors, although some concerns have recently swirled around when these profits will be seen.

Worries have also surrounded whether the -- often debt-powered -- AI expenditures will squeeze profit margins, potentially denting the case for frothy tech valuations. A string of circular dealmaking in the AI sector has also raised eyebrows among some observers.

Still, "continued strength in AI investment alongside healthy growth in other businesses will support roughly +20% sales growth for these stocks in 2026," the Goldman analysts said.

Broader, AI-driven productivity gains are also expected to lift S&P 500 earnings per share by 0.4% in 2026 and 1.5% in 2027, with the analysts suggesting that the process of widespread AI adoption remains in its infancy.

"We [...] assume both corporate adoption and the realized share of the total potential productivity boost will gradually build over time," they wrote.

Source: Investing

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Winkelmann

Stocks

Political

Reddit app is seen on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

Message board website Reddit filed a lawsuit on Friday asking Australia's High Court to overturn the country's social media ban for people under 16 as well as its inclusion in it, calling the law an infringement of free political expression.

The U.S.-listed firm, which has operations in Australia, called the ban "invalid on the ground that it infringes the implied freedom of political communication," in a court filing signed by its lawyers, Perry Herzfeld and Jackson Wherrett.

The filing named the Commonwealth of Australia and Communications Minister Anika Wells as defendants.

"We will stand firm to protect young Australians from experiencing harm on social media," a spokesperson for Wells said in response to Reddit's action, declining to comment further while the matter was before the courts.

The Australian government has previously said it is ready to fight any legal challenges to the law.

Australia went live with the world's first legally enforced age minimum to access social media on December 10. Reddit and nine other platforms, including Meta's Instagram, Alphabet's YouTube and TikTok campaigned against the measure for more than a year before ultimately saying they would comply.

The platforms are required to bar underage users or face a fine of up to A$49.5 million ($32.98 million), while underage users and their caregivers do not face punishment. Platforms say they are using measures like age inference, based on a person's online activity, and age estimation, based on a selfie, to follow the rule.

But the law "carries some serious privacy and political expression issues for everyone on the internet," Reddit said in a statement published alongside its court filing. "So, we are filing an application to have the law reviewed."

In the 12-page legal filing, Reddit said barring children under 16 would impede political discourse in the country.

"Australian citizens under the age of 16 will, within years if not months, become electors. The choices to be made by those citizens will be informed by political communication in which they engage prior to the age of 18," it read.

The lawsuit makes a second High Court challenge to the ban. Last month, two teenagers backed by an Australian libertarian state lawmaker filed a challenge which has a hearing in February.

Reddit has no plans to join other parties challenging the ban, a person familiar with the situation said.

($1 = 1.5011 Australian dollars)

Source: Reuters

Risk Warnings and Disclaimers

Add to Favorites

Dark Current

Commodity

Economic

Russian state oil and gas revenue is likely to almost halve in December compared with a year ago to 410 billion roubles ($5.17 billion) as a result of lower crude prices and a stronger rouble, Reuters calculations showed on Friday.

For the entire year, the revenue is set to fall by almost a quarter to 8.44 trillion roubles, below the Finance Ministry's 8.65 trillion rouble forecast, according to the calculations based on data from industry sources and official statistics on production, refining and supplies.

Russia reported the lowest monthly oil and gas revenues of 405 billion roubles in August 2020, when oil prices tumbled during the COVID-19 pandemic.

Oil and gas revenue is the number one source of cash for the Kremlin, making up a quarter of total federal budget proceeds. The decline is painful for Russia, which has heavily boosted defence and security spending since launching its military campaign in Ukraine in February 2022.

Ukraine and its Western backers have repeatedly said they want to force Russia, the world's second-largest oil exporter, to stop its war by undermining its economy.

The Finance Ministry had initially expected 10.94 trillion roubles in oil and gas revenues this year, but revised down its forecast in October to account for declining global oil prices, which have been falling, pressured by worries over a supply glut.

In November, the price of Russian oil in roubles used for tax purposes slumped 17.1% from October to 3,605 roubles per barrel.

The Finance Ministry will publish its oil and gas revenue estimates for Decemberon January 14.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Michelle

Forex

Economic

The U.S. dollar steadied Friday, but was on course for a third consecutive weekly fall after the Federal Reserve cut interest rates earlier this week, bringing borrowing costs to a near three-year low.

At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded largely unchanged at 97.995, but was set for a weekly drop of 0.7%.

The index is down more than 9% this year, on pace for its steepest annual drop since 2017.

Dollar slips after Fed meeting

The U.S. central bank lowered rates by 25 basis points this week, as expected, but remarks from Chair Jerome Powell at his post-meeting press conference were more balanced and less hawkish than many had anticipated.

The Fed policymakers also forecast another rate cut next year, even with members of the central bank showing divisions over December's move.

"The bearish wind is coming not only from interest rates but also from end-of-year seasonality," said analysts at ING, in a note. "Dollar rates saw another calibration of Fed expectations lower, with the 2y falling to 3.50% and the market pricing in 3.05% as the Fed terminal rate at the end of next year, keeping pressure on the U.S. dollar."

The focus going forward will hinge on economic data that is still lagging from the impact of the 43-day federal government shutdown in October and November, as well as the identity of the next Fed chair.

Euro undervalued versus dollar - ING

In Europe, GBP/USD dropped 0.1% to 1.3383, falling back from its highest level since October after data showed that the U.K. economy unexpectedly contracted in October, with uncertainty ahead of the Autumn budget by Chancellor Rachel Reeves likely curtailing growth.

Data released earlier Friday by the Office for National Statistics showed that U.K. gross domestic product fell by 0.1% on a monthly basis in October, matching the drop seen during the prior month and below the 0.1% growth expected.

The Bank of England holds its final policy-setting meeting of the year next week, and is widely expected to cut interest rates by a quarter point to 3.75% as recent data has shown inflation drifting lower.

EUR/USD edged lower to 1.1736, but the single currency was poised to register weekly gains of 0.8%, on course for a third weekly gain.

German inflation rose to 2.6% in November, confirming preliminary data, while consumer prices harmonised to compare with other European Union countries, stood at 2.3% year-on-year in October.

"Following the Fed meeting this week, the market's attention will shift to the ECB meeting next Thursday. President Christine Lagarde will present a new forecast, which should be the first test of the current pricing of no further rate cuts, in line with our view," ING added.

BOJ looms large

In Asia, USD/JPY gained 0.1% to 155.73, with the yen slightly lower ahead of next week's Bank of Japan meeting where the broad expectation is for a rate hike.

The market focus is on comments from the policymakers on how the Japanese rate path will look in 2026.

USD/CNY traded 0.1% lower to 7.0556, while AUD/USD gained 0.1% to 0.6673, set for a weekly gain of 0.5% as persistent inflationary pressures suggests the Reserve Bank of Australia could hike rates in the near-term.

Source: Investing

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Stocks

Stock Market Soars While Tech Sector Shows Cracks

U.S. equities rallied on Thursday, with the S&P 500 and Dow Jones Industrial Average reaching fresh record highs. The Russell 2000 also climbed to a new peak, signaling renewed optimism across small-cap stocks following the Federal Reserve’s decision to cut interest rates by 25 basis points on Wednesday. This rate adjustment is expected to support broader economic activity into year-end.

Yet, the Nasdaq Composite failed to join the rally, declining 0.26% due to weakness in high-profile tech names. Oracle led the losses, with shares tumbling nearly 11% after the company posted weak quarterly revenue and disclosed rising capital expenditures and lease obligations. This triggered broader skepticism around the AI growth narrative, dragging down other key players like Nvidia and Micron.

Broadcom Beats But Market Reacts to Strategic Uncertainty

Chipmaker Broadcom also reported fourth-quarter earnings and revenue that surpassed analyst estimates, along with confirmation that AI firm Anthropic is now a $10 billion customer. Despite strong financials and a doubling in net income from a year ago, Broadcom's stock dropped 4.5% in extended trading. Investors were unsettled by comments from CEO Hock Tan, who failed to ease concerns over Google’s potential pivot to in-house chip design and the uncertain terms of Broadcom’s AI-related contract with OpenAI.

Rising memory prices also surfaced as a margin threat for the company, compounding worries about profitability in the next fiscal year. These developments underline a growing trend where top-line growth in the AI space is being met with skepticism about sustainability and earnings leverage.

Sector Rotation Signals Broader Market Strength

While the tech sector faltered, investors poured into other industries. The S&P 500 financials sector, for instance, reached a new high, driven by strong performance in Visa and Mastercard. This reflects a healthy rotation into value and cyclical stocks, supported by the perception that the U.S. economy remains resilient under a lower rate regime.

The Fed’s dovish move has helped boost investor sentiment, providing momentum for risk-on positioning across various asset classes. Despite concerns about the AI sector, the broader market appears poised for a bullish end to the year assuming no major economic or geopolitical shocks intervene.

Corporate Headlines: Disney, Reddit, and Oracle

Disney announced a $1 billion investment in OpenAI and will license its iconic characters to Sora, OpenAI’s video generation platform. CEO Bob Iger framed the deal as a forward-looking play on content innovation, marking a major convergence between entertainment and generative AI.

Meanwhile, Reddit has launched a legal challenge against Australia’s recent social media ban for users under 16, arguing that the law infringes on freedom of political communication. The challenge could set a precedent for how digital rights are interpreted in age-restricted internet access laws.

Finally, Oracle’s future remains in question after its latest earnings report sparked a sell-off. Analysts are re-evaluating their price targets, citing concerns about its long-term AI strategy and high operational costs. The company’s recent investments have yet to translate into the kind of growth or clarity seen from AI peers like Microsoft or Nvidia.

Diverging Paths Define Year-End Market Narrative

The contrasting performances of traditional and tech stocks highlight an important inflection point. While AI and big tech have led markets for most of 2025, recent earnings disappointments are prompting a reassessment. Investors are increasingly seeking value in sectors with clearer profitability profiles as economic data stabilizes and monetary policy shifts to support.

With the Fed’s support now firmly in place and economic indicators showing resilience, market rotation rather than retreat appears to be the prevailing strategy heading into the holiday season. However, the future of AI-linked valuations and the ability of tech firms to meet elevated expectations will remain key themes into early 2026.

Source: CNBC

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Economic Contraction Undermines Growth Optimism Before Budget

New data from the UK’s Office for National Statistics revealed that GDP contracted by 0.1% between August and October 2025, reversing the modest 0.1% growth recorded in the previous quarter. Economists had forecast flat growth, but the contraction suggests deeper underlying weaknesses in the UK economy as it entered the critical budget season.

The drop was driven by stagnating services output normally a core driver of the UK economy along with declines in construction and production. Output in construction fell 0.3%, while production shrank 0.5%, largely due to a steep drop in vehicle manufacturing. These figures reinforce the challenges facing the Chancellor as she introduced her budget last month, seeking to boost growth while addressing fiscal pressures.

Reeves’ Budget Amid Economic Slump and Structural Pressures

Chancellor Rachel Reeves’ Budget, unveiled in November, included a series of tax hikes aimed at addressing a looming fiscal shortfall. The government is attempting to rein in public debt while stimulating growth a policy balancing act made more difficult by the latest GDP figures.

Lindsay James, investment strategist at Quilter, described the GDP contraction as evidence of the “difficulty the UK economy is going through as the government searches for some sort of growth.” She warned that October’s figures fall short of already modest expectations, casting doubt on near-term economic momentum.

This contraction also comes amid continued uncertainty over policy direction and questions over the economy’s resilience in the face of global supply chain pressures, high interest rates, and weak consumer confidence.

Monetary Policy Outlook: Pressure Mounts for Rate Cut

The data adds urgency to the Bank of England’s upcoming monetary policy decision. The central bank’s Monetary Policy Committee is set to meet on December 18, and financial markets now widely anticipate a quarter-point rate cut to 3.75%, following months of elevated rates to combat inflation.

While inflation has been cooling, the persistence of price pressures may constrain the Bank’s ability to lower rates aggressively. As Quilter’s James notes, “The pace at which subsequent cuts can be delivered remains questionable.” The contraction may tip the scales toward a more dovish stance, but policymakers must tread carefully to avoid rekindling inflation.

Yael Selfin, chief economist at KPMG UK, echoed these sentiments, predicting weak growth through the end of 2025. She warned that continued uncertainty over government policy and lingering Budget aftershocks could suppress business and consumer activity into the final quarter. As a result, flat GDP growth is expected for Q4, reinforcing the view that the UK economy is stagnating rather than recovering.

Weak Growth, Policy Dilemmas, and Rising Risks

The UK's unexpected GDP contraction highlights the fragility of its recovery and the complexity of the government’s fiscal and monetary balancing act. As Chancellor Reeves rolls out a Budget focused on stability and long-term investment, the immediate data underscores just how little momentum the economy has to build upon.

With structural challenges ranging from industrial output weakness to services stagnation still unresolved, and with political and fiscal credibility on the line, the coming months will be pivotal. The Bank of England’s rate decision will be closely watched for signs of flexibility in response to a deteriorating outlook. Yet any policy support will need to be weighed carefully against the risk of derailing inflation progress, leaving the UK economy in a precarious position as 2025 draws to a close.

Source: CNBC

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Dissolution of Parliament Marks Escalation in Political and Regional Tensions

Thailand’s King Maha Vajiralongkorn has approved Prime Minister Anutin Charnvirakul’s request to dissolve parliament, triggering snap elections within 45 to 60 days. The move follows a failed negotiation between Anutin’s minority government and the opposition People’s Party over constitutional reforms. In a statement, Anutin said the government would “return power to the people,” though critics suggest the move is as much a strategic reset for his Bhumjaithai Party as it is a concession to political gridlock.

The dissolution comes at a critical moment as border hostilities with Cambodia have intensified. Clashes have reportedly killed at least 20 people and injured many more, collapsing a ceasefire initially brokered by the Trump administration in July. While Anutin has insisted the military's operations at the border will continue unaffected, the timing of the election and deteriorating diplomatic ties may complicate both military and political strategies going forward.

U.S. Diplomacy at Risk Amid Strategic Ceasefire Collapse

The breakdown of the Thailand-Cambodia ceasefire carries reputational risks for President Donald Trump, who has taken personal credit for brokering the truce. A scheduled call between Trump and the leaders of both countries aims to defuse tensions and salvage the agreement, with Trump expected to pressure both sides to restore dialogue or risk trade consequences.

Senior economists warn that any perception of Thai non-compliance could result in U.S. retaliation. Gareth Leather of Capital Economics emphasized that Washington may reintroduce punitive tariffs if Thailand is seen as undermining a truce that Trump has touted as a foreign policy success. Given the U.S.’s leverage over regional trade and investment talks, Thailand’s diplomatic stance could directly impact its economic outlook.

Economic Fallout: Weak Growth and Trade Disruption Loom

Thailand’s political turbulence comes as the economy grapples with stagnation. The nation recorded just 1.2% GDP growth in Q3 2025, with economists already revising 2026 forecasts downward to as low as 1.6%, citing political instability, border disruptions, and uncertainty around U.S. trade policy.

A key concern is the economic fallout from severed trade ties with Cambodia. Cambodia was Thailand’s 11th-largest export market in 2024, contributing approximately 3% of total exports, largely in petroleum products. In October 2025, Thai exports to Cambodia fell a staggering 67% year-over-year due to border closures. While some exports, like oil, can be redirected to other markets, the broader collapse of bilateral trade poses medium-term risks.

Oxford Economics’ Alexandra Hermann warned that the economic hit could be compounded by a mass exodus of Cambodian migrant workers estimated between 500,000 and 1.5 million who are critical to sectors such as construction, agriculture, and services in Thailand. With a domestic labor force of around 40 million, such a loss could cause notable productivity declines in 2026.

Anutin’s Strategy: Nationalism and Military Posturing Ahead of Elections

Anutin, who came to power in September after former PM Paetongtarn Shinawatra was removed for ethical violations tied to the Cambodian dispute, has adopted a more confrontational approach at the border. Analysts suggest this may be aimed at bolstering nationalist sentiment ahead of early elections. His tougher stance could rally conservative voters, but also risks prolonging the conflict with Cambodia and further straining regional diplomacy.

While Anutin has positioned the dissolution as democratic, critics argue it reflects a calculated effort to shift blame for legislative stagnation and consolidate power under the guise of electoral legitimacy. Nonetheless, it may also expose his administration to new opposition attacks, especially if the economic and security situation continues to deteriorate.

Rising Political and Geopolitical Volatility Threatens Thailand’s Near-Term Outlook

The convergence of internal political fragmentation and external military tensions is placing Thailand in a precarious position. With parliament dissolved and border fighting reignited, the country faces the dual burden of governance paralysis and regional conflict. For President Trump, the situation poses both a diplomatic challenge and a test of his administration’s influence in Southeast Asia. For Thailand, the risks are more immediate: eroding investor confidence, deteriorating trade, labor disruptions, and a weakened macroeconomic trajectory heading into 2026.

Unless both domestic and regional conflicts are de-escalated quickly, Thailand’s economic and political outlook may face worsening instability well into the next year.