Astra Series Market Commentary | September 2026

Wildermuth Commentary September 2026.pdf

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Earnings Continue to Surprise

The stock market entered August on a strong run, with the S&P 500 up about 10% for the year through the end of July, and August continued to deliver strong returns to investors with the S&P 500 up more than 2.5% for the month. Second quarter earnings gave investors yet more reason for confidence. Among more than 440 S&P 500 companies that had reported by mid-August, 86% exceeded analysts’ estimates, with earnings running about 29% above expectations.[i]

The results were also strong compared with a year earlier. S&P 500 earnings per share rose 53%, while sales increased nearly 16%. Even excluding unusually large investment gains at Amazon and Alphabet, earnings growth was the strongest since the fall of 2021.[ii] More companies also raised their profit outlooks than lowered them, by nearly a two to one margin.

Energy company earnings rose more than 147%. Communication services earnings increased about 117%, consumer discretionary about 92%, and technology about 70%.[iii] The S&P 500 was on track for a seventh consecutive quarter of double-digit earnings growth.

Still, artificial intelligence remains the lead story. Amazon’s cloud results helped drive a 15% one day gain in its stock. Microsoft added a record $450 billion in market value in a single day, around a 16% increase, after its earnings eased concerns about returns on heavy spending for data centers and chips. Nvidia also rose 12% in one week, its strongest weekly gain since May 2025. While AI spending has surged at Amazon, Alphabet, Meta and Microsoft, analysts now expect the spending to pay off with revenue for the group projected to grow at an annualized rate of 18% over the next two years.[iv]

Consumers are also continuing to spend. Retailers have reported solid demand for appliances, toys and clothing despite higher fuel prices and inflation. Higher stock prices and home values are helping support spending among wealthier households, even as many consumers face greater pressure from higher everyday costs.

Despite the strength in earnings, the broader environment still carries substantial risk. Federal Reserve policy, geopolitical tensions, and inflation all have the potential to disrupt the current earnings bonanza.

The international picture is also a bit murky. In China, second quarter GDP grew 4.3%, its slowest year-over-year pace since 2022. Consumer spending remains weak, the property market is still struggling, and investment has contracted. Yet, exports rose 24% in July from a year earlier, highlighting the contrast between strong external demand and a weaker domestic economy.[v]

Europe’s data have been more encouraging. German factory orders rose 3.1% in June, compared with expectations for a 0.4% decline. The country’s manufacturing sector has held up remarkably well this year despite the sharp rise in energy prices resulting from the war in Iran. Switzerland’s economy also grew 1.5% in the second quarter, its strongest quarterly growth since 2021.[vi]

The risks have not disappeared, but the underlying numbers show an economy and a corporate sector that remain considerably stronger than many investors expected. Barring a significant or unexpected change, the rest of 2026 will likely continue along a similar path.

Daniel Wildermuth

Portfolio Manager, Quartz Astra Strategies

[i] Butters, John. “S&P 500 Earnings Season Update: August 7, 2026.” FactSet. FactSet Research Systems, Inc. 2026, August 7. https://insight.factset.com/sp-500-earnings-season-update-august-7-2026

[ii] ibid.

[iii] ibid.

[iv] Dinesh, Shradha. “Blockbuster Earnings Bolster Stocks’ Record Run.” Wall Street Journal. 2026, August 9. https://www.wsj.com/finance/stocks/blockbuster-earnings-bolster-stocks-record-run-97551889

[v] Miao, Hannah. “China’s Economy Weakens on Several Fronts as Property Bust Worsens.” Wall Street Journal. 2026, August 17. https://www.wsj.com/economy/chinas-economic-activity-weakened-in-july-0ce9bde7?mod=economy_lead_story

[vi] Forbes, Don Nico. “German Factory Orders Continue to Defy Mounting Headwinds.” Wall Street Journal. 2026, August 6. https://www.wsj.com/world/europe/german-factory-orders-unexpectedly-jumped-in-june-ef0d6002?mod=economy_feat1_global_pos5

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DATA SOURCES

Market Data: https://www.wsj.com/market-data


INDEX DESCRIPTIONS

The Standard & Poor’s 500 Index is a capitalization-weighted index that is generally considered representative of the U.S. large capitalization market.

The NASDAQ Composite Index is a capitalization-weighted index that is comprised of all stocks listed on the National Association of Securities Dealers Automated Quotation System stock market, which includes both domestic and foreign companies.

The Dow Jones Industrial Average is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.

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