Analysis: As earnings support U.S. stock rebound, worries over future profits grow

With the vast majority of S&P 500 companies reported, second-quarter earnings are expected to have climbed 9.7% from a year earlier, well above the 5.6% estimated on July 1, according to Refinitiv IBES. The robust profits have supported a rally that has taken the S&P 500 up about 14% this quarter, after a brutal first half.

While goods make up less than a third of gross domestic product, earnings tied to goods are expected to account for 62% of S&P 500 earnings this year, BlackRock said. "The risk of disappointing earnings is one reason we're tactically underweight stocks," BlackRock said. Morgan Stanley's strategists, meanwhile, are focused on the prospect of weakening profit margins. Overall analyst estimates call for companies' operating margins at all-time highs next year, they noted.

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