U.S. Companies Delivered A Blockbuster Earnings Season. The Consumer Slowdown Hasn’t Hit Profits Yet.

Corporate America is coming off one of its strongest profit quarters in years, with companies across retail, technology and manufacturing reporting higher earnings even as consumers contend with persistent inflation and signs of slowing spending.

Profits from current production across U.S. corporations increased by $400.9 billion in the second quarter, compared with a $74.4 billion increase in the first three months of the year, the Bureau of Economic Analysis said last week. The increase came even as U.S. economic growth slowed to an annualized 1.5% during the quarter.

Earnings growth was even stronger among publicly traded companies, with S&P 500 companies on track to report a 52% year-over-year increase for the second quarter, according to FactSet. That would be the index's strongest growth since the second quarter of 2021 and far above its five-year average of 15.2%.

Unusually large investment gains at Alphabet and Amazon accounted for part of the increase, although earnings would still have risen substantially without them, FactSet data showed. Target, J.M. Smucker, Deere, Abercrombie & Fitch and Garmin are among the companies that have also raised their full-year forecasts following recent results, the Wall Street Journal reported.

Consumer spending has continued to support corporate results, although the latest government figures show some signs of cooling after months of relatively strong demand. U.S. retail and food-service sales fell 0.6% in July from June but remained 5% higher than a year earlier, according to the U.S. Census Bureau, while sales during the May-through-July period were up 6.3% from the same three months in 2025.

That slowdown was visible in Walmart's latest results, with the retailer raising its full-year sales and profit forecasts even as U.S. comparable-sales growth weakened and its shares fell following the report. Reuters reported that comparable sales rose 2.6%, the company's slowest quarterly growth in six years, as higher gasoline prices and softer consumer demand weighed on spending.

Another boost for some companies has come from refunds issued after the Supreme Court struck down Trump's emergency tariffs, giving businesses additional room to cut prices or protect their profit margins. Walmart said it had received substantially all of the $2.9 billion it was eligible for and is using part of the money to lower prices, while other businesses have used refunds to offset costs or fund their own price reductions.

Continued spending on artificial intelligence infrastructure has provided another source of demand across parts of the economy, although the second-quarter profit surge has been heavily influenced by some of the market's largest technology companies. FactSet estimates that excluding Alphabet alone would reduce S&P 500 earnings growth for the quarter from 52% to 40.6%.