Experts Warned This Would Be a Volatile Earnings Season. So Far They’re Right.
Experts Warned This Would Be a Volatile Earnings Season. So Far They’re Right.
Kara GreenbergThu, July 23, 2026 at 8:54 PM UTC
0
Post-earnings swings in shares of some of America’s most valuable companies rattled markets ThursdayCredit: Michael M. Santiago / Getty ImagesKey Takeaways -
JPMorgan analysts this week warned investors could face a particularly volatile earnings season for U.S. stocks, based on recent options pricing.
Big swings in shares of Tesla and Alphabet after their earnings reports could reinforce that view and signal more volatility ahead for other companies set to follow.
Some Wall Street experts are warning investors could be in for a bumpier ride than usual this earning season.
Analysts at JPMorgan told clients in a note earlier this week that “options are pricing above-average earnings volatility” this quarter, “reflecting earnings uncertainty, high investor crowding and leverage, and potentially a returning geopolitical risk premium” as tensions flare in the Middle East.
High expectations for earnings growth could also set the stage for more-punishing reactions from investors if companies fail to impress, the bank said in an earlier note last week. “While our base case is that it will be cleared, there is higher risk of disappointment,” the analysts wrote.
Why This Matters to Investors
America’s biggest companies are widely expected to post strong second-quarter earnings, but elevated expectations could also make it harder for companies to wow investors with their results.
Advertisement
JPMorgan warnings seem to be playing out, as post-earnings swings in shares of America’s most valuable companies rattle markets. Shares of Google parent Alphabet (GOOGL) fell 7% Thursday after the company said it plans to boost spending on its AI buildout this year, overshadowing better-than-expected results. Tesla’s (TSLA) stock plunged nearly 15%, hitting its lowest level in nearly a year after a profit miss.
The performance of the two companies, the first of the Magnificent 7 to report this earnings season, could signal more volatility ahead for others set to follow. Next week looks to be one of the busiest of this earnings season, with several heavyweights including Microsoft (MSFT), Meta (META), Apple (AAPL) and Amazon (AMZN) scheduled to release results.
For longer-term investors, however, the prospect of heightened volatility could lead to more opportunities to buy the dips in their favorite stocks. JPMorgan analysts said they aren’t backing off their support for Alphabet, and that they “would be buyers” after the cloud and search giant’s recent pullback.
on Investopedia
Source: “AOL Money”
