JPMorgan strategists led by Mislav Matejka say third-quarter earnings should reassure investors as strength broadens beyond AI, even though headline expectations look elevated. Consensus expects S&P 500 Q3 EPS growth of 24% per IBES, or 30% per FactSet and LSEG after adjusting for a one-off Meta tax charge; excluding Nvidia and Micron the hurdle falls to 15%, and to 8% for the median stock. European growth is expected at 19% (11% excluding energy), while global PMIs hit multi-year highs and the earnings lead indicator is still rising, suggesting at least the next two seasons should be positive. A sharp bond yield spike is nearing oversold levels, and if yields peak as results start, equities could advance into year-end. JPMorgan remains positive on European semiconductors, banks, chemicals and industrials.
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