Citadel Securities highlights best S&P 500 earnings season since COVID recovery

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A powerful earnings season is helping justify Wall Street’s sharp rally in 2026, according to a recent investor note from Citadel Securities’ Scott Rubner, as corporate profits continue to outpace expectations and ease concerns about stretched valuations.

The S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) delivered its strongest quarterly earnings performance since the post-pandemic recovery, with first-quarter profit growth accelerating to roughly 25.5% year-over-year. That figure came in far above the approximately 13% analysts had expected heading into reporting season, highlighting broad-based resilience across corporate America.

Technology companies remained the primary driver of earnings momentum, with the sector posting nearly 50% year-over-year EPS growth. Rubner noted that upward earnings revisions have significantly exceeded normal seasonal trends, particularly among mega-cap firms benefiting from accelerating artificial intelligence adoption and infrastructure spending.

The improving profit outlook has also altered the market’s valuation picture. Despite the S&P 500 gaining roughly 10% year-to-date, its forward price-to-earnings ratio has declined from about 22.3x at the start of the year to near 21x currently, as earnings estimates surged higher.

Meanwhile, the Nasdaq-100 continues to trade below its five-year average valuation multiple even after rebounding sharply since late March, suggesting the rally has been supported more by earnings growth than speculative expansion.

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