Despite the turmoil caused by Trump, the S&P 500 still managed to achieve historical growth.

The second quarter of 2025 has seen a surprising turn of events for the S&P 500 companies, with better-than-expected results and strong profit margins despite the ongoing tariff uncertainties.

David Kostin, an analyst at Goldman Sachs, has highlighted the impressive performance of companies in the leading index, stating that their profit margins have been stronger than anticipated. This trend, according to Kostin, is likely to continue in the coming quarters.

One of the standout performers in Q2 2025 has been the Magnificent 7 - Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla. These global tech giants have maintained their top positions in the global market capitalization rankings, despite stock value losses related to trade policies. In fact, Microsoft was the most valuable company worldwide during this period, and Nvidia also held a leading market valuation.

The exceptional results of the Mega-Cap Tech companies, excluding Tesla, have been a significant contributor to this strong performance. A total of 84 percent of companies beat Wall Street estimates, and the total profits of the S&P 500 increased by eleven percent year-over-year, almost triple the consensus expectation of four percent.

Companies have been managing the impact of tariffs by negotiating with suppliers, adjusting supply chains, passing on prices to consumers, and cutting other costs. This resilience has allowed many companies in the S&P 500 to close a strong second quarter.

The Magnificent 7 companies have also demonstrated their ability to maintain profit margins despite tariffs. They achieved a 26 percent year-over-year increase in EPS, a testament to their financial strength and adaptability.

Analysts estimate that the nominal sales growth for both large and small and medium-sized companies will remain stable until the end of 2025. This stability, coupled with the mathematically superior margins of the largest technology companies, is expected to boost margins for the overall S&P 500 index.

Goldman Sachs has declared that the profits in the second quarter are among the strongest in history. The steady depreciation of the US dollar this year has also boosted sales growth abroad for companies.

However, uncertainty remains regarding the economic impact of tariffs, and Kostin and his team have expressed concerns that the profit margin estimates for 2026 may be too optimistic. Despite this, they expect many S&P-500 companies to maintain high profit margins in the coming quarters.

The earnings season for the second quarter is almost over, marking a successful period for the S&P 500 companies amidst challenging economic conditions.