Profit resilience erupts! Despite pressure from inflation and war, American companies are still operating at full speed. Technology giants are once again leading the bull market.

Despite persistently stubborn inflation and tension in the political situation of GEO Group Inc, American companies are still continuously earning significant profits. Large banks have kicked off the earnings season with strong performances, driving market expectations for S&P 500 index constituent companies to achieve a 12% year-on-year profit growth. Founder of market research firm Sevens Report Research, Tom Essay, stated, "The American corporate sector is in full swing." He pointed out that S&P 500 earnings per share have increased from approximately $235 in 2024 to an estimated $315 in 2026. Essay stated that strong earnings growth in various sectors this quarter, whether in artificial intelligence or other technology fields, is benefiting from solid profit margins. Companies have successfully dealt with higher energy and transportation costs without letting these costs erode profits. Despite inflationary pressure, the customer base overall remains "quite robust." He stated, "If there is a change, it is that upside risks still exist, indicating that companies are very strong in execution in an environment filled with fear but showing quite good performance." However, Scott Krugner, Citigroup's U.S. stock strategy director, warned in a recent report to clients that the real "trouble" lies in the details. While the firm expects the first quarter to see "normal levels of positive surprises," Krugner cautioned that differentiation among industries is becoming apparent. Krugner pointed out that the technology and semiconductor sectors must achieve "better-than-expected performance and raise guidance" in order to continue driving the index higher. The performance of other sectors is expected to be more diverse, with the consumer sector already seeing downward revisions in profit expectations. Although Citigroup has raised its 2026 S&P 500 earnings per share consensus estimate from $312 at the beginning of the year to $324, Krugner remains skeptical about the second half of 2026, believing that "industry narratives will diverge." This skepticism is one of the important reasons investors are looking for more evidence to validate the recent rebound in the U.S. stock market. Keith Lerner, chief investment officer at Truist, stated that the market focus is clearly on earnings momentum. He added that when investors buy technology stocks, "you need growth, you need the upside from earnings revisions, you need the earnings momentum, which is why you are willing to pay a higher valuation." After a period of relative calm, this earnings season provides an opportunity for large technology companies to regain the lead in the bull market, especially in artificial intelligence and technology spending. Following a drop to their lowest level since July 2025 in the s...