The big things you need to know:

• First, the S&P 500 EPS backdrop has stabilized, but we still anticipate further downward revisions for 2025 S&P 500 EPS. After a preliminary model refresh, we are maintaining our 2025 S&P 500 EPS forecast of $258, which is below the bottom-up consensus of $265.
• Second, we’ve updated our S&P 500 valuation model to reflect updated RBC house views on key macro variables like interest rates and inflation. It suggests that last week’s gap up in the stock market was largely deserved, but that upside from here may be limited without another major step-up improvement in broader macro expectations.
• Third, we run through our thoughts on the Moody’s US debt downgrade from a US equity market perspective.

The big things you need to know:

• First, it was another week of stabilization on the earnings stats we track, helping to support the recent stabilization in equity market pricing.
• Second, there was a little less conversation about tariffs in last week’s earnings calls, which left some additional room for discussions on the health of the consumer and the impacts of non-tariff policy changes.
• Third, in our other weekly updates, the thing that jumps out is that when we bake in current consensus assumptions on key macro variables and bottom-up EPS for 2025, the S&P 500 ended the week roughly in line with where our model says fair value for the index should be at year-end.

The big things you need to know:

• First, earnings sentiment has stabilized a bit, helping stock prices find some footing for the moment.
• Second, we run through our thoughts on what we learned from last week’s earnings calls. We think there are two different perspectives at play on the consumer, which may be adding to investor confusion. We exited the week seeing managing tariff impacts as a work in progress, but with a greater appreciation of the work that has been done.