US Earnings Revisions Turn Negative, Ending Longest Upgrade Streak Since 2021

September 23, 2026 at 03:24 PM2 min

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Equity analysts have turned net negative on US corporate earnings for the first time in 23 weeks, ending the longest run of upgrades since September 2021, according to a Citigroup index. The shift reflects concerns about inflation and higher interest rates, with weakness concentrated in consumer staples, discretionary, materials, and financials. Morgan Stanley strategist Michael Wilson warned the S&P 500 could drop as much as 7% if valuations decline further and energy prices prompt tighter policy.

Key Facts

More analysts cut than raised US earnings estimates for the first time in 23 weeks, ending the longest upgrade streak since September 2021, according to a Citigroup index.
Morgan Stanley strategist Michael Wilson warned the S&P 500 Index is at risk of dropping as much as 7% if stock valuations extend a recent decline and energy prices prompt tighter monetary policy.
The OECD said inflation around the world will be faster than forecast in 2027, necessitating tighter monetary policy.
The Federal Reserve hiked US interest rates earlier this month for the first time in three years in response to price pressures.

Earnings Revision Downturn

Equity analysts have turned net negative on the outlook for US corporate earnings for the first time in months, reflecting concerns about the effect on profits of inflation and higher interest rates. More analysts have cut rather than raised their earnings estimates for the first time in 23 weeks, ending what had been the longest run of upgrades since September 2021, according to a Citigroup Inc. index. The main drivers of the weakness come from consumers, both staples and discretionaries, materials and financials, said Stephan Kemper, chief investment officer at BNP Paribas Wealth Management Germany. Kemper linked the revisions to a combination of higher living costs and rising energy prices.

Market Risk Warnings

Morgan Stanley strategist Michael Wilson warned earlier this week that the S&P 500 Index is at risk of dropping as much as 7% should stock valuations extend a recent decline and if further increases in energy prices prompt tighter monetary policy. Inflation around the world will be faster than forecast in 2027, necessitating tighter monetary policy, the OECD said in a report on Wednesday. The Federal Reserve hiked US interest rates earlier this month for the first time in three years in response to price pressures.