The Daily Breakdown looks at the S&P 500 as we wrap up Q2 earnings season. Elsewhere, Palantir bulls look for support.
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What’s Happening?
Approximately 97% of S&P 500 firms have reported Q2 earnings, and so far it’s been far better than expected. We already know what many of the firms have been saying on Wall Street — first from the banks and credit card companies, then with retailers.
Now here are some of the key stats from the quarter, with Q2’s earnings report card for the companies that have reported so far:
- 81.4% of S&P 500 firms have beat analysts’ expectations, putting the S&P 500 on pace to establish its best “beat rate” since Q3 2021.
- Conversely, the rate of earnings misses — the “miss rate” — stands at just 14.5% right now. That’s the lowest miss rate in almost four years (Q3 2021).
- Analysts came into the quarter expecting about 2.8% earnings growth. Exiting the quarter, S&P 500 firms are clocking a growth rate closer to 10.7% right now. That spread — 7.9 percentage points — is one of the widest spreads in several years.
- Companies that beat Q2 earnings estimates posted a rally that was roughly in-line with the average (going back to 2020). However, companies who missed expectations have seen the worst reaction so far this decade, down an average of 5.3% — almost double the average decline of 2.9% in the prior quarters since 2020. Specifically, tech and healthcare stocks were punished most for missing.
- On the revenue front, 68.8% of firms are beating estimates, the highest beat rate since Q4 2021. For context, last quarter that figure stood at just 51.1% and hasn’t topped 60% since Q1 2023.
If you are wondering what some of the longer-term implications from this quarter may be, look no further than the S&P 500’s expected earnings per share over the next 12 months, as it hits a new all-time high.
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The Setup — Palantir
Palantir has been on an amazing run so far this year. Despite the stock’s current pullback, shares are still up 109% so far in 2025 and are up 421% over the past year. Bulls are looking for a bounce amid the current pullback, and at least for now, shares are finding support near the $150 area, as well as the 50-day moving average.
If this area remains support, bulls will want to eventually see a rally over the $165 level — which has been recent resistance over the past week — opening the door to potentially higher prices. However, if current support breaks, bearish momentum could ensue.
Options
Buying calls or call spreads may be one way to take advantage of a possible rally. For call buyers, it may be advantageous to have adequate time until the option’s expiration.
Those that aren’t feeling so bullish or who are looking for a deeper pullback, puts or put spreads could be one way to take advantage.
For those looking to learn more about options, consider visiting the eToro Academy.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.
