Impressive results from US companies
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After a hot fall, a spring tornado could wreak havoc in France
Barely half a year after this year’s French budget was passed, the wrangling over the 2027 budget is about to begin, but that’s not all, because France will also hold a presidential election next spring. During the first public presidential debate, some of the radical candidates put forward ideas that were, at times, unconventional. Although the presidential election in late April still seems far off, based on the latest polls, if no candidate secures enough votes and a runoff is held, it cannot be ruled out that two radical presidential candidates will face off against each other. Market participants may have begun to price in this growing uncertainty, as the yield spread between French and German 10-year government bonds has started to widen again in recent weeks. The period ahead promises to be full of twists and turns, so it will be worth keeping a close eye on developments in French domestic politics.
Commodities - Technical Analysis
Gold and silver prices have retested their uptrend lines, so the long-term trend may continue. Oil prices have broken out of a contracting pattern, which may signal the start of another upward wave. Natural gas prices have also begun to rise, signaling a buy. In the case of copper, the main uptrend remains in effect, and there are currently no signs indicating a change in the trend’s structure. Following significant gains, wheat and corn have become heavily overbought, increasing the likelihood of a correction.
Although more corporate earnings reports are due in the coming days, in the US, earnings season is nearing its end. U.S. companies have had a strong quarter in terms of profits; according to FactSet, the S&P 500 index could see a 27.7% increase in first-quarter earnings growth. Earnings growth is expected in ten of the index’s eleven subsectors this quarter: the technology sector likely saw the strongest profit growth, and within that sector, companies in the semiconductor industry may see the highest earnings growth.
The first trading days of May were also shaped by news related to the conflict in Iran and the Strait of Hormuz, as well as a stronger-than-expected earnings season in the US. The first quarter earnings season is slowly drawing to a close, and S&P 500 companies are poised to report a strong quarter. Earnings growth was highest among technology companies, and seven of the index’s eleven subsectors posted double-digit percentage growth in earnings.
The S&P 500 has managed to climb to new all-time highs several times in recent days; however, based on current analyst forecasts, there is only minimal room left for further gains this year. The median year-end target for the index is currently 7,501 points, compared to 7,550 in January. Looking at current expectations, Yardeni Research has the highest year-end target price forecast (8,250), while BCA is the most pessimistic (6,375). The majority of target price expectations fall within the range of 7,300 to 7,725. The index’s current 2026 EPS expectations are 2.6% higher than the median earnings expectations at the beginning of the year.
Last week also saw the release of several key earnings reports: Palantir closed the quarter with strong revenue growth and exceptional profitability, while Novo Nordisk managed to exceed modest expectations, and the Danish pharmaceutical company also slightly raised its full-year forecast. AMD’s figures, which surged significantly in April alone, were preceded by heightened expectations; the chipmaker beat consensus estimates across all metrics in the first quarter, and management’s forecast also improved beyond expectations. While Orsted’s earnings report was mixed, Uber got off to a strong start this year. Important corporate earnings reports are still to come in the weeks ahead; Cisco Systems reported on Wednesday, and during the week of May 18, Nvidia, Deere, and Walmart, among others, will also release their latest figures.
As of the afternoon of May 12, approximately 90% of the companies in the S&P 500 have already released their earnings reports. Companies reported revenue that was on average 2% above expectations, while those that have already published their latest figures reported EPS that was 17.8% above expectations on average.
According to FactSet data, the S&P 500’s first-quarter earnings growth rate could stand at 27.7% (year-over-year), which is significantly higher than the ten-year average earnings growth rate of 10.3%. The index’s estimated earnings growth rate for this year is expected to be 21% based on current projections.
Looking at the eleven subsectors of the S&P 500, earnings growth is expected in ten of them in the first quarter (year-over-year), led by technology and communication services, while only one subsector (healthcare) is expected to see a decline in earnings for the quarter, according to current forecasts. The technology sector is generating the strongest earnings growth, and within the sector, semiconductors are expected to see the highest profit growth (99%, year-over-year). At the company level, Micron Technology—which is also on our Equity Top Pick List—and Nvidia are expected to contribute the most to the sector’s profit growth.
S&P500 technical picture
The series of rising lows and highs has not yet been broken. As long as this structure remains unchanged, a reversal pattern cannot form. On the upside, the rally may encounter strong resistance around 7500; this level may still be reachable. A strong support zone would be expected around 6875, but over time this level could rise. We are seeing a slight loss of momentum, but no reversal pattern yet.
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