JPM Daily Credit Strategy

Nathaniel Rosenbaum, CFA AC ( Pavan D Talreja, CFA ( North America Credit Research JPMORGAN J.P. Morgan Securities LLC J.P. Morgan Securities LLC 19 August 2026 Silvi Mantri ( J.P. Morgan Securities LLC

JPM Daily Credit Strategy Update Corporate America’s earnings strength remains very broad across debt buckets; Curveball published Q2 earnings season is drawing to a close with 86% of S&P 500 companies having now reported. While the headline earnings growth rate of 50.4%, the highest since 2Q21, is undoubtedly aided by another strong quarter from the largest technology platforms (and the remarking higher of their private company stakes), the earnings boom is no longer solely a mega-cap story. Excluding Alphabet and Amazon, earnings growth was still a very strong 32.0%, marking a second consecutive quarter above 25% and a seventh straight quarter of double-digit earnings growth. Likewise, four sectors have delivered earnings growth in excess of 40% which in turn meant 3x sectors grew earnings faster than Tech this quarter: Energy (147%), Communications (117%), Consumer Discretionary (92%), and Technology (70%).

Figure 1: Best of both worlds: Post-recession earnings growth levels Figure 2: Broadening growth: 3x sectors grew earnings faster than without the recession Tech 100% 180% 147% 2Q26e Earnings Growth S&P 500 Earnings Growth 90% 150% 117% 80% 120% 92% 70% 90% 70% 50% 42% 60% 60% 21% 17% 16% 50% 30% 9% 8% 40% 0% 30% -30% -7% 20% Energy

Communications Consumer Technology S&P 500 Materials Financials Industrials Utilities Real Estate

Consumer Staples Health Care 10% 0% -10% 4Q26 3Q26 Discretionary 2Q26 1Q26 4Q25 3Q25 2Q25 1Q25 4Q24 3Q24 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 3Q21 2Q21 1Q21 Source: J.P. Morgan, FactSet. Source: J.P. Morgan, FactSet.

The same story of broadening earnings growth emerges when viewing results through a credit lens, which we do below by slicing up S&P500 earnings by total debt buckets (a broader measure than index debt, in order to capture cross-currency issuance, CP etc). Grouping companies by total debt outstanding shows debt-weighted earnings growth exceeding 20% across every debt cohort and above 30% for four of the six buckets. Companies in the largest debt bucket (with more than $50bn of total debt) continue to lead with 43% earnings growth, but the sharpest acceleration in Q2 occurred in the intermediate debt buckets, with earnings growth in the $20-50bn and $10-15bn cohorts rising to 33% and 37%, respectively. In other words, strong earnings momentum seems very broadly distributed across most swathes of the credit market.

Figure 3: S&P500 earnings growth by debt bucket: Companies with more debt are delivering stronger earnings growth Average earning growth y/y by debt bucket 50% 43% Q1 2026 earnings season 38% 37% Q2 2026 earnings season 40% 34% 32% 33% 30% 30% 26% 27% 27% 27% 23% 20% 8% 9% 10%

0% Overall $50bn+ $20-50bn $15-20bn $10-15bn $5-10bn <$5bn (100%) (10%) (16%) (10%) (13%) (22%) (30%)

Source: J.P. Morgan, Bloomberg Finance L.P. (excludes SNDK and ALB from sample)

The breadth of earnings growth should be reassuring for credit investors and is another facet of pushing back on the notion that issuer/sector concentration is rising in an unhealthy manner. Rather than depending on a narrow set of mega-cap issuers, the current earnings season suggests that profit momentum extends well beyond the largest issuers and across much of corporate

Nathaniel Rosenbaum, CFA AC ( Pavan D Talreja, CFA ( North America Credit Research JPMORGAN JPM Daily Credit Strategy Update J.P. Morgan Securities LLC J.P. Morgan Securities LLC 19 August 2026 Silvi Mantri ( J.P. Morgan Securities LLC

America. This backdrop helps explain why credit fundamentals remain resilient despite elevated financing costs and rising debt burdens.

Lastly, looking at the issuer level, we screen for companies with earnings growth above 40% in both 1Q and 2Q26, versus issuers with earnings declines greater than 5% in both quarters, among companies with at least $5bn of debt outstanding in JULI:

Figure 4: Issuers with consistently stronger earnings growth this year (> +40%) Issuer Ticker 2Q Earnings Growth 1Q Earnings Growth…