Goldman Sachs: S & P 500 earnings exceed expectations, corporate tariff response and dollar weakness help

Goldman Sachs strategists said S & P 500 companies had far better-than-expected results this quarter as they found ways to soften the tariff shock and benefit from a weaker dollar. As the second-quarter earnings season drew to a close, earnings per share for S & P 500 companies as a whole rose 11 per cent year on year, well above the consensus forecast of 4 per cent. "This quarter was one of the most frequent earnings outperformance episodes in history," David Kostin, chief US equity strategist at Goldman Sachs, wrote in a report. US companies have fared better than expected in the face of tariffs as they have been able to negotiate with suppliers, adjust supply chains, cut costs and pass on price increases to consumers. In addition, analysts slashed their earnings forecasts sharply in the spring due to Trump's tariffs, which also made it easier for companies to "beat expectations" on a low base. Goldman Sachs strategists said a weaker dollar also contributed to faster sales growth in the second quarter.