After an 'extraordinary' earnings season, here's the next big positive for stocks

After a banner second quarter earnings season helped push stocks to new highs this summer, there is a new combination at play that could aid the bull run going into the fall — provided oil prices don't explode above $100 a barrel and a hawkish Fed Chairman Kevin Warsh doesn't begin a rate-hiking cycle.

The next stock catalyst is the one-two punch of rising analyst profit estimates and fewer estimate cuts.

Earnings are bucking the seasonal revision trend and continuing to inflect upward, Evercore ISI strategist Julian Emanuel pointed out in a new note (see the chart below).

What's more, estimates for the median stock in the S&P 500 ( ^GSPC ) have risen across top-line growth, bottom-line earnings, and free cash flow returns.

"We are living in extraordinary times," Emanuel wrote.

It appears that way from corporate America's standpoint.

With second quarter earnings season just about done for the S&P 500, about 86% have reported earnings per share above estimates, per FactSet data. This is above the five-year average of 78% and above the 10-year average of 76%.

If 86% is the actual number for the quarter, it will mark the highest percentage of S&P 500 companies reporting a positive EPS surprise since the second quarter of 2021 (87%).

In total, companies are reporting earnings 26.5% above estimates, which is also above the five-year average of 7% and above the 10-year average of 7.4%.

The second quarter earnings growth rate for the S&P 500 stands at 52%. If 52% is the final growth rate for the quarter, it will be the fastest earnings growth rate reported by the index since the second quarter of 2021 (91.6%).

These are "stellar fundamentals, even after adjustments," Goldman Sachs strategist Ronnie Walker said of the quarter's results.

Brian Sozzi is Yahoo Finance's Executive Editor, host of the ' Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn . Tips on stories? Email brian.sozzi@yahoofinance.com.