In the first quarter of 2025, 228 companies within the S&P 500 cited "inflation" during earnings calls, a figure consistent with the previous four quarters. The Consumer Staples sector led with 86% of its companies referencing inflation. The frequency of inflation mentions by S&P 500 companies tends to correlate with Consumer Price Index (CPI) movements. For the second quarter of 2025, 50 S&P 500 companies have issued positive earnings per share (EPS) guidance, exceeding both the five-year average of 42 and the ten-year average of 39. However, analysts have reduced EPS estimates for Q2 by 4.1% since March 31, a decline greater than the ten-year average reduction of 3.1% for a quarter. Year-over-year earnings growth for the S&P 500 in Q2 is expected at 4.9%, down from the 9.3% estimate on March 31, while revenue growth is projected at 4.1%, below the prior estimate of 4.7%. Meanwhile, U.S. stock valuations remain elevated, with the S&P 500’s forward 12-month price-to-earnings (P/E) ratio at 21.6, surpassing both the five-year average of 19.9 and the ten-year average of 18.4. The trailing 12-month P/E ratio stands at 26.5, also above historical averages. Other major indices show similar trends, with the Nasdaq 100 P/E ratio at 27 and the Russell 2000 at 24. U.S. household equity allocation is at 43%, one of the highest levels historically and notably above the 1990s Dot-Com Bubble peak, reflecting increased stock market exposure among American investors.