End of Month Market Intelligence: rally, interrupted (barely)

Research evidence excerpt

End of Month Market Intelligence: rally, interrupted (barely)

A solid macro backdrop and the ongoing AI

investment boom should lead to another quarter of strong earnings results despite an

elevated hurdle set by analyst estimates. The high hurdle: consensus forecast for 2Q26 is

for 22% year/year growth — that’s an acceleration from 1Q26’s 17% pace. See also the

chart of the month below.

Key to watch: As enterprise AI adoption continues to progress, investors are trying to

assess how much companies will spend on AI, where in the AI ecosystem that spending

will be concentrated, and whether that spending will generate a sufficient return. Jim

Covello sat down with Allison Nathan in early June to discuss when and what we might

see on the AI front and we captured the conversation in an Exchanges podcast: “The AI

Investment Boom: When Will It Pay Off?” See also Covello’s Apr-30 note, “AI Spend vs.

Benefit: Marking our views to market two years later.”

Listen to the FOGO. Finally, last Thursday we sat down with John Flood, head of

Americas Equities Execution Services in Goldman Sachs Global Banking & Markets, to

discuss what he is seeing from the Goldman Sachs trading floor, and capture the

conversation in The Markets podcast, “Why US Stocks Could Climb Higher.” Fun fact:

John Flood was the face off/get off (FOGO) for Harvard Lacrosse in 2007 and was

selected by the Major League Lacrosse team, Washington Bayhawks in the fourth round

of that year’s draft.

chart of the month — the bar moves higher

Ben Snider gets ahead of 2Q26 earnings season in last Friday’s Kickstart, “S&P 500 Q2

2026 earnings season preview.” Actual reported earnings have exceeded forecasts in

every quarter since the pandemic except 4Q22 (the end of the 2021 Tech bubble). But

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