Rathbones flags higher equity volatility risk as earnings growth concentrates in AI, energy sectors
SPY•Rathbones said S&P 500 third-quarter earnings growth is forecast at 27%, concentrated in AI-linked stocks, while Stoxx 600 growth is forecast at 25%, led by energy. Options pricing implies average post-results moves of 5.4% for S&P 500 stocks.
1. Earnings growth outlook
Rathbones flagged strong corporate profits as a key support for equities entering the third-quarter reporting season. S&P 500 earnings growth is forecast at 27% year on year, its highest since 2021, with growth concentrated in AI-linked stocks; the top 10 stocks are seen driving more than two-thirds of earnings-per-share growth.
2. Regional forecasts and volatility
Hyperscaler spending on AI infrastructure is expected to more than double year on year. Stoxx 600 earnings growth is forecast at 25%, led by energy, while median growth is projected at 10%. Options pricing implies average post-results moves of 5.4% for S&P 500 stocks.
