Earnings season is upon us, and Wall Street expects companies in the S&P 500 Index that aren’t tied to artificial intelligence to rake in profits. That would be good news if it pointed to a broadening out of earnings growth, but instead the gauge is in a Pyrrhic boom created by President Donald Trump’s war with Iran. It’s a bump that we’ll pay for later.
Energy industry net income is expected to soar about 135% in the third quarter from a year earlier, while the aerospace and defense industry may see profits jump by about 50%. Add to that the projected 39% jump in the materials sector — including war-impacted petrochemicals, fertilisers and metals — and you’ve explained away most of the non-AI strength.
