Beneath the index, the leadership profile is clear. “The performance of tech and communication services carried the index, and is driving earnings upgrades globally,” say Ng and Kellenberger. “There was some evidence in 2Q2025 that vast AI capital expenditure is starting to pay off, through rising cloud computing and digital advertising revenues. A weaker dollar helped tech giants with large international sales. The AI tailwind also lifted selected industrials and utilities, amid renewed growth in power demand from data centres and electrification, while solid capital market activity saw financials perform better than expected. Yet a number of more traditional cyclical and defensive sectors, including materials, industrials, healthcare, and consumer staples, did less well” .
Global equities are drawing support from a solid 2Q US earnings season and ongoing momentum in a narrow cohort of market leaders, even as investors weigh tariff effects, firmer positioning and a slower growth backdrop. The tone from corporate results is resilient at headline level, with margin discipline and early signs that large-scale AI investment is feeding through to revenues. At the same time, breadth remains an issue, Europe’s upgrades are scarce outside financials, and companies are flagging uncertainties that are likely to show up more fully from 3Q2025 onwards.
“The second quarter US earnings season, now entering its final stages, looks solid at an aggregate level, with S&P 500 companies growing earnings by around 9%, just above the 10-year average, and 80% beating earnings estimates. Margins are expanding, and companies are managing tariff risk to date through supply chain adjustments, price increases and robust cost discipline,” according to Edmund Ng, Senior Equity Strategist, and Patrick Kellenberger, Emerging Market Equity Strategist, at Lombard Odier in a CIO Office Viewpoint dated Aug 12 . “While we expect a material slowing of the US economy in the second half, we see recession risks as contained, which should allow corporate earnings to keep growing. Indeed, since the start of the reporting season, full year 2025 and 2026 consensus earnings estimates for global equities have ticked up,” they add.
