The Kobeissi Letter, a markets commentary publication, reported on X today, October 20, 2026, that a significant slowdown in corporate earnings growth is anticipated for the third quarter of 2026. The publication stated, "Corporate earnings growth is set to slow: 10 of the 11 sectors in the S&P 500 are estimated to record lower YoY earnings growth in Q3 2026, compared to Q2." The Consumer Discretionary sector is expected to show the largest deceleration, dropping from +91% year-over-year in Q2 to an estimated +2% year-over-year in Q3.
This projection comes as companies prepare for the upcoming earnings season, which will provide insight into corporate performance during current economic conditions. Recent Gokhshtein coverage has detailed various revenue milestones and challenges for firms, including Mercury crossing a $1 billion revenue run-rate and Anthropic's $16.8 billion revenue milestone, highlighting varied performance across industries. Upstart stock faced a 5.76% decline this month, with its November 3 earnings report needing to deliver 31% revenue growth.
The Kobeissi Letter's analysis suggests an eventful earnings season ahead, with the projected slowdown indicating potential headwinds for overall market performance. The publication's figures show that Communication Services earnings growth is projected at +66% in Q3, down from +126%, while Financials are estimated to decrease to +2.4% from +22.3%. Even the best-performing sectors, Energy and Information Technology, are expected to see declines in growth rates, from +147.8% to +122.5% and from +77.9% to +65.9%, respectively.
