Q2 Earnings Surge Masks Market Fault Lines

Q2 2026 earnings season is 27% complete, and the headline numbers look outstanding. Eighty-six percent of S&P 500 companies that have reported beat EPS estimates, well above both the five-year average of 78% and the ten-year average of 76%, per FactSet data from July 24. Blended earnings growth stands at 37.9% year over year. If those numbers are your whole picture, the market looks fine. They are not the whole picture. Key Takeaways 86% of S&P 500 reporters beat EPS estimates in Q2 2026, above the 5-year average of 78%, but blended growth falls from 37.9% to 25.9% once Alphabet's $98 billion one-time GAAP gain is stripped out. SPY, the S&P 500 ETF, closed Monday at $738.93 (+0.10%), masking…