S&P 500’s Humming Profit Engine Can Keep Powering Stocks Rally

A solid earnings season shows Corporate America’s profit engine is humming along, potentially easing worries that the record-setting rally in US stocks is starting to overheat.

With about a third of S&P 500 Index members reporting by Thursday’s close, this earnings cycle is turning out to be much more robust than expected. Around 83% of companies have exceeded analysts’ profit estimates, according to data compiled by Bloomberg Intelligence. That’s on track for the highest share of beats since the second quarter of 2021.

The S&P 500 is up 28% since hitting a low on April 8, setting a series ...