The stock market may already be adjusting to a future with slower earnings growth 🤔

Even as stock prices rally to new highs 📊

Earnings have been growing at a blistering pace. But it seems unlikely to last.

According to FactSet, analysts expect the S&P 500’s 2026 earnings to reflect 30% growth from last year. This helps explain why the index is up 14% since the beginning of the year, following last year’s 16% rally and 2024’s 23% surge.

Some people are worried about what could happen to stocks if and when the earnings growth rate cools.

I think this is a legitimate concern since earnings are the most important long-term driver of stock prices.

But I have two thoughts.