Wall Street is often an optimistic bunch when it comes to estimating future sales and profits from corporate America.
But even when considering that ingrained tendency, what’s on display right now from the Street borders on absurdity. And it puts investors at risk for a harsh reality check as earnings begin to kick into overdrive soon.
Per a new projection from RBC Capital Markets (see charts below), the S&P 500’s per-share dollar value in the 2026 fourth quarter is expected to be $324. That has improved significantly since the start of the earnings reporting season, when it was at $313.
Meanwhile, the bottom-up consensus forecast includes some operating margin expansion for the S&P 500 this year — and revenue growth of 9%.
The projected year-over-year growth rate for earnings per share in the fourth quarter is 16.6%, up from the 12.6% growth rate anticipated for 2025.
All three charts from RBC reflect a Wall Street almost forgetting the backdrop S&P 500 companies are currently operating in, which is likely to continue for a few more quarters.
That is a US at war with Iran since Feb. 28, which has brought skyrocketing oil and gas prices and fresh signs of economic uncertainty.
Over the past five days, oil prices have undergone a volatile relief-and-retreat cycle as the market reacted to shifting geopolitical developments in the Middle East.
After peaking near $120 a barrel during the height of Operation Epic Fury, prices plunged sharply early last week. WTI crude fell about 13%, and Brent crude dropped to approximately $94.26 by Friday night following the announcement of a temporary ceasefire.
However, as of today, that downward trend is reversing again amid the collapse of high-level peace talks over the weekend.
Oil prices have spiked to $103 a barrel on Monday.
Regular unleaded gas prices hit a national average of $4.16 a gallon on April 8, the highest since the summer of 2022.
“With the U.S. not coming to agreement or terms with Iran, it is likely that the Strait [of Hormuz] will remain under their control and that oil prices and thus gasoline, diesel and jet fuel prices keep rising due to the likely continued closure of the Strait,” GasBuddy head of petroleum analysis Patrick De Haan warned.
Read more: What an extended war with Iran could mean for gas prices
In early April, the University of Michigan’s Consumer Sentiment Index tanked to a record low of 47.6, down from 53.3 in March. This is the lowest reading since the survey began in 1952, with consumers calling out the Iran conflict and soaring gas prices as the main reasons for their pessimism.