The market's enthusiasm for large-cap technology, communication services, and consumer discretionary sectors, fueled by advancements in "AI," shows no signs of abating as we look towards 2025, 2026, and 2027.
An examination of the S&P 500's projected earnings per share (EPS) reveals a consistent upward trend, suggesting that the underlying strength of these sectors is expected to persist. However, a note of caution emerges for the year 2026. Historically, following periods of robust S&P 500 performance, such as the impressive gains observed in 2023 and 2024 (with a year-to-date return of +15.65% as of November 15, 2025), the fourth consecutive year often presents a more subdued picture, with returns typically ranging from low single digits to negative. This cyclical pattern, while not a definitive predictor, warrants attention despite a projected 14% EPS growth rate for 2026, a forecast that echoes similar sentiments from the previous year.
This period of sustained growth, particularly in technologically driven segments, reflects a dynamic and adaptive market. While the robust EPS projections offer a positive outlook, investors are encouraged to remain vigilant and consider historical market tendencies when formulating long-term strategies.
The consistent expansion of earnings per share within the S&P 500, particularly within these innovative sectors, underscores the resilience and progressive nature of the economy. This growth trajectory, powered by technological evolution and strategic market positioning, illuminates a path towards continued prosperity and demonstrates the capacity for businesses to adapt and thrive in an ever-changing global landscape.