Wall Street expects S&P 500 earnings to grow 29.6% in the third quarter (Q3). An investment panel from CNBC says guidance from AI-linked tech giants, not that figure, may decide whether the rally holds.

Q3 earnings face a high bar, as FactSet data show growth topping estimates in 37 of the past 40 quarters. An in-line report could therefore disappoint.

Are Q3 Earnings Already Priced In?

One panelist expects the numbers to land roughly as forecast. FactSet shows analysts raised Q3 estimates by 1.4% during the quarter. In contrast, estimates have typically fallen 2.5% during a quarter over the past decade.

So far, 84% of the 19 S&P 500 companies that had reported by Oct. 9 beat estimates.

However, the panelist said guidance is the real test. FactSet projects 15.8% earnings growth for 2027, down from 32.7% in 2026, according to its Earnings Insight report.

Companies have already guided higher. A record 72 S&P 500 firms issued positive Q3 earnings guidance, and 44 of them are technology companies.

One panelist said market reaction may outweigh the data, pointing to Nvidia, whose shares have at times lagged strong results.

Meanwhile, another panelist said over half of S&P 500 stocks sit below their 200-day averages.

Will AI Spending Keep Holding Up the Market?

One panelist said tech’s key test is whether hyperscalers, the cloud giants building AI data centers, keep spending. Executive interviews suggest nobody is pulling back, the panelist added, since cutting spending risks losing the AI race.

Analysts expect S&P 500 earnings growth of 29.2% in Q3, after Q2 growth of 52.2% beat the end-of-quarter estimate of 23.1%. Source: FactSet

That panelist also said steadier yields, this week’s inflation data, and big bank earnings could help other sectors catch up.

In contrast, another panelist called financing the counterpoint, citing reports that investors are growing wary of AI-related debt.

Rates add pressure. The 10-year Treasury yield closed at 5.24% on Oct. 9, near a 24-year high, according to U.S. Treasury data.

A pattern of misses across several tech names, one panelist warned, would be hard for the market to absorb. With technology firms issuing most positive guidance, the index’s momentum may rest largely on one sector delivering.

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