Key Highlights

  • J.P. Morgan estimates third-quarter S&P 500 earnings growth of 24% year on year, falling to 15% excluding Nvidia and Micron, and only 8% for the median stock.
  • LSEG data show growth above 30% for the quarter, which uses a different base and date, so the gap between providers is a definitional issue more than an error.
  • Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) holds each S&P 500 company at roughly the same weight, so its profit picture is closer to the median stock than to the index headline.
  • The 8% median growth sits well below the 24% headline, which shows how much of the quarter's growth depends on a handful of large companies.

Three Numbers for One Quarter

Third-quarter earnings season is underway, and providers disagree on growth. J.P. Morgan estimates S&P 500 earnings up 24% year on year, 15% excluding Nvidia and Micron, and 8% for the median stock, according to published market commentary. LSEG data show growth above 30%. The two measures use different dates and bases, so neither is necessarily wrong. Earnings from banks including Truist, Regions and M&T have already arrived, and large technology and industrial companies report in the coming days. The headline figure will move as more results are added, so each provider's number is a snapshot of expectations and actuals at a particular date and may be revised.

Why Weighting Changes the Answer

The S&P 500 weights companies by market value, so the largest firms dominate the index and its growth rate. Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) weights each company about equally, so a small company counts as much as the largest. If profits at a few companies rise sharply while most grow slowly, a market-value measure looks strong and an equal-weight measure looks modest. Excluding Nvidia and Micron cuts J.P. Morgan's estimate from 24% to 15%, and the median stock at 8% is lower again. That spread explains why the index can look healthy while many companies feel pressure from higher yields near 5.09% and oil near USD 100.

Risks and What to Watch

The risk is that the strong headline hides a narrow base, so a stumble at a few large companies would pull the average down quickly. Estimates also move, and growth above 30% may include one-off gains or different definitions. Investors should watch Tesla and Meta Platforms on October 21, Western Digital on October 22, and updates to the provider estimates. The Fed meets on October 27 to 28, and higher yields could weigh on valuations, especially for smaller companies. Equal weighting also has its own risk: Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) gives more weight to firms with less pricing power. Figures are estimates, not guarantees.

Where Things Stand

The answer is that profit growth depends on how it is measured: 24% by market value, 15% without two giants, 8% for the median stock and above 30% in another dataset. Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) is the fund that tracks the equal-weight view, which is why it matters here. The next catalysts are mega-cap earnings on October 21 and 22 and the Fed decision on October 28. Figures are estimates from providers, not guarantees, and this is not investment advice.