S&P 500: Earnings hold firm amid AI-led selling – Deutsche Bank

At 7377, the S&P 500 gained 0.31% on Friday but ended the week 2.68% lower, its weakest weekly performance since April 2025, according to Deutsche Bank. Shares with AI exposure suffered steep declines, as sector rotation benefited Consumers Discretionary and Communications Services. Against this volatile backdrop, Deutsche Bank’s asset allocation team says Q3 earnings growth remained notably robust both globally and in the US, with margins at record levels.

AI Sell-off Weighs on Index as Earnings Remain Robust

"The S&P 500 fell -2.68% (+0.31% Friday), marking its worst weekly performance since April 2025."

"Moreover, the most AI-exposed areas saw even bigger declines, with the Philly semiconductor index down -12.15% (+4.21% Friday), whilst CoreWeave fell another -15.44% (+6.28% Friday)."

"Our asset allocation team have reviewed the global earnings season here and highlighted how growth has remained remarkably strong in Q3 despite a very high hurdle after 38% year-on-year growth in Q2 and persistent upgrades ahead of the reporting season."

"US earnings growth likely held at 34%, with the median company growing 14% and growth excluding Tech, Energy and Materials at 13%, one of the strongest rates since the GFC."

"So although consensus sees some moderation in 2027, the striking feature of this earnings season has been how broad-based the strength remains even against an exceptionally demanding starting point."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)