S&P 500 Broadens: Other 493 Firms Drive Fastest Profit Growth

S&P 500’s first-quarter earnings season showed a meaningful broadening: beyond the headline mega-cap tech names, the index’s other 493 constituents contributed materially to aggregate profit growth. FactSet data indicate that while the so-called 'Magnificent Seven' delivered outsized EPS gains, the collective increase among the remaining stocks pushed overall S&P 500 earnings to their fastest pace in nearly five years.

According to the reported and estimated results compiled by FactSet, the Magnificent Seven—led by firms such as Nvidia, Microsoft, Alphabet, Amazon, Meta, Apple and Tesla—recorded roughly 63.2% year-over-year EPS growth for the quarter, their strongest since mid-2021. At the same time, the aggregate EPS growth for the other 493 names was about 17.4%, and combined the figures produce an overall S&P 500 earnings increase of approximately 28.4% for the period.

Market implications are notable: breadth improvement reduces concentration risk and suggests that cyclical and materials sectors, boosted by demand for fertilizers, lithium and other commodities, are participating in the earnings recovery. Retail and consumer names showed mixed signals—as some reported healthy results while others flagged pressure from higher energy and grocery prices—highlighting a more K-shaped recovery across income and sector lines.

In a broader macro context, the earnings strength arrives amid concerns about higher oil prices and geopolitical volatility, which could weigh on consumer spending and input costs. The Federal Reserve’s policy path and inflation data will remain key for corporate guidance and investor positioning as companies update their outlooks for the rest of the year.

Analysts caution that while the Magnificent Seven still dominate index-level returns, the improved performance of the other 493 firms is a constructive sign for market robustness. The coming weeks of reports and updated analyst estimates will determine whether the earnings breadth sustains and whether AI-related capital expenditure ultimately translates into durable margin expansion across sectors.