Markets are entering the second-quarter earnings season, with stronger growth expected in the US than in Europe, while the energy and technology sectors are set to lead market performance on both sides of the Atlantic, according to an analysis by an investment platform.

“Furthermore, with the resumption of the conflict with Iran on Wednesday evening, this reporting season will also provide insight into how high energy prices have affected companies and their management’s view of the way forward in a difficult geopolitical situation,” said eToro analyst Bogdan Maioreanu.

For companies in the S&P 500, analysts now expect earnings to rise about 23% year-over-year for the second quarter of 2026, marking the second consecutive quarter of growth of more than 20%, according to Factset. Ten of the 11 sectors in the index are expected to post gains, led by energy, information technology and materials, while healthcare is the only sector expected to decline.

By contrast, earnings for companies in the European STOXX 600 index are expected to be up 14.5% year-over-year, according to LSEG I/B/E/S, with gains concentrated in the Energy, Basic Materials and Technology sectors, with more modest gains or slight declines in more defensive sectors such as healthcare and utilities. Excluding the Energy sector, earnings are expected to grow 5.5%, the analyst said.

“This quarter of financial reporting will also give us a better understanding of how energy prices have affected companies in and outside the energy sector. For investors, this is important, especially since the truce in the war with Iran ended on Wednesday evening, with the US striking 90 targets in the Islamic Republic. Oil prices are rising, with Brent at $78 and WTI above $73. Since the financial reports will refer to the months in which the conflict in Iran caused oil prices to rise to high levels, the energy sector is expected to be the one that stands out clearly in both indices,” the analysis indicates.

In the S&P 500, sector profits are expected to rise by about 122% year-on-year, supported by an average second-quarter oil price of nearly $93, about 45% higher than last year.

Meanwhile, in the STOXX 600, energy sector profits are expected to rise by about 109% and revenues by more than 40%.

The US technology sector is the second major growth driver, with profits expected to rise by more than 60% and solid performance across the board from semiconductors, hardware and software, while the European technology sector is seeing more moderate profit growth of about 14%.

“This earnings season, the overall beat-or-miss narrative will likely matter less, as investors may be more interested in how management teams are using the extra cash flow. With AI-related energy and technology driving earnings, investors seem increasingly willing to back companies that redirect funds earmarked for share buybacks toward capital expenditures (capex) in factories, data centers, software, and semiconductor manufacturing capabilities, as long as those expenditures are disciplined and tied to clear increases in revenue or efficiency. Investors seem willing to overlook lower short-term cash returns in exchange for an inspiring vision for the near future. Not every investment story, however, comes with a premium. Markets tend to back companies that invest productively, especially when management can coherently explain how today’s capex is linked to stronger profits and sustainable growth over time. Investors are looking for spending disciplined that clearly boost revenue or efficiency, not capital expenditures made just to keep up with competitors,” believes Bogdan Maioreanu.

Investors are also watching for new trends and signs that other sectors, beyond the recent market winners, are starting to gain momentum.

According to the latest eToro Retail Investor Beat survey, at the end of the second quarter, Romanian investors considered the pharmaceutical sector to be the most undervalued (19%), followed by technology and materials (17%) and energy (16%).

As for the most overvalued sectors, Romanian retail investors consider them to be the technology sector (21%), followed by real estate and energy (20%), utilities (17%) and financial services (16%).

“It remains to be seen whether the market will prove them right,” emphasizes Bogdan Maioreanu.

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