US reporting season provides guidance in turbulent market environment

While tech stocks continue to lose favor with investors, Trump is building up military threats against Iran, and this development is bringing geopolitical concerns back into the spotlight for investors. The Supreme Court's decision to rule illegal some tariffs is causing further uncertainty. These events are pushing the US reporting season, which has been quite positive so far, somewhat into the background.

Around 85% of S&P 500 companies have disclosed their quarterly figures for the fourth quarter of 2025 (Bloomberg, February 20, 2025), with both earnings and revenue growth in the US exceeding analysts' expectations. Profits rose by more than 12% compared to the fourth quarter of 2024, and revenues also increased by 8.9%. It is also interesting to note that this time, all 11 sectors reported positive profit growth (Bloomberg, February 20, 2025). Double-digit increases were observed in commodity companies, the IT sector, the industrial sector, financial services providers, and the communications services sector. At the lower end of the growth scale, we find the consumer goods industry, real estate companies, and the healthcare sector. In terms of revenue, 10 of the 11 sectors reported an increase. Only the energy sector recorded a decline in sales of around 1.3% in the fourth quarter of 2024.

Despite this positive development, the S&P 500 has been treading water since the beginning of the year (+0.24% in US dollars, source: Bloomberg, as of the close of trading on Friday, February 20, 2026).

This is partly due to the fact that the heavyweights in the index were unable to match the performance of previous years. Investors are critical of the excessive investment in new data centers and are holding back on further investments in the IT sector. The sell-off in the software sub-sector (see our previous Markets Mail: Why software is experiencing a hard landing » Kathrein) also contributed negatively to sentiment and, of course, to the index's performance.

Nvidia is the only one of the major US tech companies that has not yet published its figures. The data will be available on February 25, 2026, after the US stock market closes.

Sabre rattling in the Middle East

The prospect of a potential escalation in the US-Iran conflict could now force investors to reassess their positions. At the center of concerns is the Strait of Hormuz – one of the most important arteries of global energy supply. A military conflict in this region could undo the hard-won stabilization of energy prices.

President Trump wants a “deal” to reach an agreement on Iran's nuclear program in line with the ideas of the US and Israel. If no agreement is reached, the president no longer rules out military strikes against the mullah regime.

Although Iranian airspace is largely unprotected, as demonstrated by the US air strikes on Iran's nuclear program in June 2025, another attack on targets in Iran poses a major threat to stability in the Middle East.

Russia has warned against a military strike and is participating in naval exercises in the Strait of Hormuz together with Iranian forces.

Iran's UN ambassador warned that any military action by the US would result in a “resolute and proportionate” response.

It is difficult to analyze how serious the US president's threats are. We are monitoring developments and will adjust our assessments accordingly.

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