LIVE Markets-"From extraordinary to still better than ordinary": Barclays on earnings outlook

Main US indexes rallied, with the Nasdaq up about 1.5% and the S&P 500 up more than 1%.

Tech led S&P 500 sector gainers, while staples was the sole loser.

The dollar was roughly flat; US crude pared losses to be down just about 0.1%; bitcoin rose; gold gained more than 2%.

The US 10-year Treasury yield fell to around 4.95%.

With the latest earnings season all but wrapped up, Barclays equity strategists, led by Venu Krishna, asked in a research note if current growth levels are sustainable. In summary, they say that while 2027 growth "may decelerate from this year's extraordinary pace" they see it remaining above the long-term trend.

Krishna & company estimate year-over-year earnings growth of 31% for 2026 and recently set a 13.4% growth forecast for 2027 with an expectation that earnings per share (EPS) will rise to $414 from $365.

This would mark the first four-year stretch of double-digit EPS growth since the mid-2000s and push the three-year EPS compound annual growth rate (CAGR) to its highest level since 2012, according to strategists. Their current estimates compare with a 35-year median S&P 500 .SPX annualized EPS growth rate of 10%.

The strategists attribute the strength in earnings to a lengthening AI investment runway, ongoing supply and demand imbalance along with pricing tailwinds and "broadening revisions breadth." And with AI as the dominant growth engine, the strategists say that "fears around a capex cliff or component pricing collapse appear overblown."