Q1 Earnings Closed With 78 Percent Beating and Now the Calendar Hands Off to PLTR AMD and ARM

The first quarter earnings season hits its midpoint this week with 313 of the S&P 500 reporting through Friday's close. Blended earnings growth across reporters came in at 9.4 percent, well above the 5.1 percent that analysts had forecast at the start of April. Beat rates were 78 percent on the top line and 81 percent on the bottom line, both ahead of the five-year average. Margins held up better than expected, particularly in financials and industrials where pricing power has been a question mark for two quarters.

Apple's report Thursday set the tone going into the weekend. Revenue of 111.2 billion dollars beat the 108.4 billion estimate and earnings per share of 2.01 dollars cleared by a clean dime. iPhone revenue of 57.1 billion was up 21 percent year over year, the strongest growth since the launch quarter for iPhone 12. Services revenue hit a record 30.1 billion. The company also announced an additional 100 billion dollars in share repurchases on top of the existing program. The stock added 3.5 percent in after-hours trade.

Big tech as a group came in stronger than feared. Microsoft Azure grew 37 percent, Google Cloud grew 32 percent, and Amazon Web Services grew 19 percent. Capital expenditures across the four largest spenders are now tracking toward 700 billion dollars for 2026, up from 385 billion last year. The composition of that spending has shifted further toward Nvidia silicon and toward power infrastructure, which is keeping data center developers and the utility sector in focus.

Banks had a quietly strong quarter. Net interest margin beats ran 14 to 18 basis points across JPMorgan, Bank of America, Citigroup, and Wells Fargo. The KBW Bank Index is up 6.4 percent year to date, outperforming the S&P 500 by roughly 200 basis points. Loan loss provisions came down across the major regionals, and credit card net charge-off rates held flat sequentially after rising for six consecutive quarters. The combination of stable credit and expanding margins is what is driving the outperformance.

The week ahead carries real catalysts. ISM Services for April releases Monday morning and consensus is 52.4, which would be a third consecutive month of expansion. Q1 unit labor costs come Tuesday and that print matters for the inflation debate inside the Federal Reserve. Palantir reports Tuesday after the close, AMD reports Tuesday after the close, and ARM reports Tuesday after the close, which makes it the most important earnings night of the quarter for AI-exposed names. McDonald's reports Wednesday before the open, Disney reports Wednesday after the close, and Coinbase reports Thursday after the close.

The April nonfarm payrolls report arrives Friday May 8 at 8:30 AM Eastern. Consensus is plus 145,000 with the unemployment rate steady at 4.3 percent and average hourly earnings up 0.3 percent. The previous report showed 178,000 jobs added in March with an upward revision to February. The labor market has now added jobs in 53 consecutive months, the longest streak in the postwar series. Anything below 100,000 would shift the Fed conversation noticeably toward a June cut.

Treasury yields finished Friday with the 10-year at 4.39 percent, up 5 basis points on the week, and the 2-year at 3.88 percent. The curve is now positively sloped by 51 basis points, which is the steepest reading since July 2022. Investment grade credit spreads are at 87 basis points over Treasuries, the tightest since November 2024. High yield spreads are at 312 over, in 38 basis points on the month. Apple's 14 billion dollar 7-tranche debt issuance Wednesday priced at the tightest levels of any 2026 deal.

Sector breadth has been the story of the year. Of the 313 reporters so far, 187 raised full-year guidance and 124 cut it. Industrials and financials lead the raise count. Healthcare lags. Energy reports were mixed because the integrated majors used hedging programs that smoothed but did not eliminate the impact of crude prices. Defense names including Raytheon, Lockheed Martin, and Northrop Grumman all reported record backlogs, with Raytheon's hitting an all-time high of 192 billion dollars.

The S&P 500 closed Friday at 7,230, an all-time high, up 10.4 percent for April, the best monthly return since November 2020. The Nasdaq 100 closed at 25,114, also a record. The Russell 2000 added 11.7 percent for the month, outperforming large caps for the first time since November 2023. Equal-weight S&P closed up 8.1 percent for April, narrowing the gap to the cap-weighted index.

For investors with cash to put to work this week, laddered Treasuries between 4 and 7 years yield 4.04 percent on average. Investment grade corporate ladders in the same duration yield 4.81 percent. Money market funds remain at 4.20 to 4.40 percent for short-dated emergency reserves. The next major macro catalyst after May 8 jobs is the June 17 FOMC meeting, where futures currently price a 64 percent probability of a 25 basis point cut.