By Caroline Valetkevitch

NEW YORK (Reuters) – Investors are watching to see if technology companies and related heavyweights can add to recent strong profits and if growth will spread to other sectors. as corporate America prepares to report the final quarter of another standout year for Wall Street.

They also wanted to hear what US companies could say about the potential impact in 2025 from proposed tariffs, deregulation and tax policies under the new administration of President-elect Donald Trump.

The fourth quarter of 2024 US earnings season continues next week, with some of the largest US banks, including JPMorgan Chase (NYSE: ) and Wells Fargo (NYSE: ), is expected to report results on Wednesday.

Analysts expect companies as a whole to have a revenue increase of 9.6% in the fourth quarter of 2024 compared to last year, which is better than the 9.1% revenue growth in the third quarter of last year. year, according to data compiled by LSEG.

The S&P 500 rose 23% in 2024, the second consecutive year of gains exceeding 20%, fueled in part by sharp gains in Nvidia (NASDAQ 🙂 , Microsoft (NASDAQ 🙂 ). Communications services, which include companies such as Alphabet (NASDAQ:), and information technology will have the largest sector gains in 2024.

Even after a weak start to 2025, the S&P 500 trades at a whopping 21.5 times forward earnings, expensive compared to a 10-year average price-to-earnings ratio of around 18, based in LSEG data.

“We have had a lot of expansion in the last two years. We need to see the profitability kind of compliance, so it is important what these companies say about their basic conditions,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial (NYSE: ) in Troy, Michigan.

Expectations are high for big tech-related names, so they should deliver upbeat results, he said, but “many sectors of the economy are expected to see revenue growth start to accelerate, and that could start” with the upcoming fourth quarter results.

Communications services and technology companies dominate revenues in 2024, and they are estimated to have one of the largest growth rates in the fourth quarter as well, LSEG data shows. But the financials appear above for the fourth quarter of 2024 growth as well, with an estimated quarterly profit of 17.5%.

And profit growth is expected to expand in 2025, with health care leading the way along with technology, and stronger growth seen in industrials, materials and energy compared to 2024, based on LSEG data.

“Growth rates are picking up from 2024 to 2025,” said Stephanie Lang, chief investment officer at Homrich Berg in Atlanta, and “what we see as positive is the expansion of earnings.”

Market watchers also want to hear from company executives about potential policy changes after Trump takes office on January 20.

Some of Trump’s plans, particularly those for higher tariffs, could raise consumer prices, while potentially less regulation under the new administration could boost growth. of income in financial and other sectors.

CNN reported Wednesday that Trump is considering declaring a national economic emergency to provide legal justification for a large swath of universal tariffs on allies and adversaries alike.

“There’s obviously a lot of uncertainty right now, and the timing of the tariffs and the cadence at which they are rolled out is very important,” said Timothy Chubb (NYSE:), chief investment officer at Girard, a King’s-based Univest Wealth Division. Prussia, Pennsylvania.

“I’m also interested in the color we can get from deregulation banks,” he said.

Also, uncertainty over how many more times the Federal Reserve may cut interest rates in the current easing cycle is likely to focus on the company’s comments about the strength of consumers and the US economy, which has so far defied expectations for a slowdown.