American Corporations Are Crushing It. This Stock Rally Isn’t Just About Tech.

General Motors offered an upbeat outlook for the rest of the year. Above, a Chevrolet dealership in Glendale, Calif. (Mario Tama/Getty Images)

Key Points

• General Motors, 3M, GE Aerospace, and Coca-Cola reported strong third-quarter results, exceeding Wall Street forecasts.
• Third-quarter S&P 500 profits were recently forecast to rise by 9.3% to $574.4 billion, with potential for double-digit growth.
• Expected year-over-year third-quarter earnings growth for the Magnificent Seven tech titans is 14%, and 7.8% for other S&P 500 companies.

U.S. companies are stampeding through the third-quarter earnings season, setting up the stock market for an end-of-year rally that could defy the risks from tariffs, inflation, and the trade war with China that still overshadow the world’s biggest economy.

Tesla and International Business Machines will take the baton on Wednesday, providing September quarter updates that effectively fire the starting pistol on an important series of earnings from the tech sector that probably will dictate market performance over the coming weeks.

That said, a host of bellwether companies outside of tech topped Wall Street’s forecasts for sales and profits over the three months through September on Tuesday, potentially carving a smoother path for the market’s heavier-weighted stocks.

General Motors , an old-economy stalwart, offered a robust outlook for the final months of the year that helped lift the stock to its highest close on record.

3M, which has outpaced the S&P 500 this year, also lifted its 2025 profit forecast as new CEO Bill Brown keeps launching new products and boosting revenue from existing customers. Shares surged 7.7% to close at the highest level in just over four years.

And GE Aerospace , the largest of three divisions the famed industrial conglomerate split into last year, raised its profit outlook for the second time in four months. The market for aircraft is robust, allowing for improved deliveries of GE engines. The stock also closed at a record high.

On the consumer end, Coca-Cola’s recent focus on healthier drinks, including sugar-free sodas, and its ability to pass on price increases helped it beat Wall Street’s earnings forecast. Overall revenue came in at $12.5 billion, the highest in more than a decade.

Jean Boivin, who heads the BlackRock Investment Institute, sees resilient economic growth, Fed Reserve rate cuts and continued spending on artificial intelligence as likely to bring broader earnings growth.

“LSEG data show expected year-over-year Q3 earnings growth for the
‘magnificent seven’ tech ech titans is 14%,” he said in a recent note. “But performance is broadening out, with estimated growth of 7.8% for the other S&P 500 companies, a much narrower gap than in recent quarters.”

The broader market only got a modest boost from the quartet of solid updates. That makes sense given their relatively limited influence on major indexes when compared with their megacap tech peers —although they did help lift the Dow Jones Industrial Average briefly north of the 47,000 point mark.

Still, the underlying strength of the results, as well as signals from bank earnings last week, bode well for both the remainder of the profit-reporting season and the economy’s near-term prospects.

“While the more fragile market could persist near-term, foundations of accelerating growth, increasing CEO confidence, rising consumer spending, stable credit, and falling interest rates remain intact,” said Wedbush analyst Seth Basham in a recent note.

The solid run of profit figures speaks to American corporations’ ability to weather unprecedented tariff uncertainty, supply-chain disruptions, an increasingly cautious consumer, and higher costs for labor and raw materials that have weighed on margins.

Despite those challenges, collective third-quarter S&P 500 profits were recently forecast to rise by around 9.3% from last year to around $574.4 billion. And that was before this week’s slate of updates, which could push the overall growth rate back into double digits.

BlackRock’s Boivin’s observations highlight how the economy operates, particularly in times of big policy changes. The biggest U.S. companies aren’t only able to adapt, but also benefit from innovation that might not directly affect them.

A company using AI to streamline its domestic workforce can quickly find itself with more financial firepower to spend on products and infrastructure. A tech company getting a boost from tax benefits tied to data-center construction can hire more people. A drinks group taking advantage of consumer lifestyle changes can tweak its offerings to meet the new, healthier zeitgeist.

Wedbush’s Basham, in fact, sees that ability to adapt as both crucial to the current earnings season and the growth prospects of companies over the coming months.

“We view this quarter as a runway for the winners, where strong execution and positive guidance will distinguish the winners from the laggards,” he said. “Companies that deliver are likely to see momentum into 2026, while those who can’t keep up may be ‘left for dead’.”

Write to Martin Baccardax at martin.baccardax@barrons.com