Meanwhile, the U.S. budget deficit rose to about $1.99 trillion in fiscal year 2026, marking the highest level since fiscal year 2021. According to Reuters, the deficit increased by $217 billion, partly driven by the reversal of tariff revenues and the baseline spending needed to service the nation’s debt, which has exceeded $40 trillion, as well as higher defense spending.
Reuters quoted Walter Todd, chief investment officer at Greenood Capital in South Carolina, saying: "Investors like me wonder how sustainable these massive figures are. We have posted excellent profits, but the problem is that comparisons will be extremely difficult next year for many of these companies."
FactSet data released on October 16 shows that index‑component companies’ earnings grew about 29% year‑over‑year in the third quarter. The figure blends reported results with estimates, as only 9% of companies have actually reported, and the third quarter would mark a third consecutive quarter of growth exceeding 25% if forecasts hold.
Although corporate gains bolster the U.S. economy, the distribution of those benefits remains uneven. Elizabeth Bankoti, vice‑president of policy at the collaborative research center Groundwork, says wealthier investors reap a larger share, while wage‑dependent households feel pressure when inflation outpaces wage growth.
In a February estimate by asset‑manager Apollo, projected capital expenditures for the largest cloud‑computing firms total roughly $646 billion this year, about 2% of U.S. GDP. This is a comparison of spending volume, not an estimate of its net contribution to output growth.
Technology and artificial‑intelligence firms remain among the strongest profit drivers. In the first quarter of this year, Google Cloud revenue jumped 63%, Microsoft’s Azure and other cloud services grew 40%, and Amazon Web Services sales rose 28% year‑over‑year, according to company disclosures.