The Data-Backed Case for Staying Invested in a Noisy Market

It is easy to lose perspective when the week includes Iran claiming missile strikes on US destroyers, Canada posting a significant jobs miss, and a court striking down a tariff. There is a lot of noise.

If you want this reflected in how a portfolio is built, see our cross-border investment management service.

Here is the signal.

Q1 2026 S&P 500 earnings per share growth was revised upward from 14 percent to 26 percent. AI capital expenditure is now tracking to add 22 percent to 2026 full-year EPS growth. Fidelity’s Jurrien Timmer, a market historian as much as an analyst, describes this as a secular bull market that is 17 years in.

Source: Fidelity Weekly Market Pulse, Jurrien Timmer, May 4, 2026

The numbers don’t lie. This market is being supported by real earnings growth, not by speculation or momentum alone.

Why the Revision from 14 to 26 Percent Matters

Earnings estimates are revised constantly. Most revisions are small and directional. A revision from 14 percent to 26 percent is neither.

It means that as the quarter closed and companies reported, the actual results were dramatically stronger than analysts expected going in. That is not a fluke. That reflects genuine outperformance at the operating level across a broad set of companies.

The driver, again and again in the earnings calls, is AI infrastructure spending. Alphabet reported Google Cloud revenue up 63 percent year over year in Q1. Amazon posted its fifth consecutive quarter of AWS revenue acceleration. Microsoft’s Azure continues to grow. The hyperscalers are not guessing about AI demand. They are reporting it.

Source: Bloomberg Earnings Data, April-May 2026; Raymond James, The Open, April 30-May 8, 2026

The picks and shovels argument, that the real value in AI goes to the companies building the infrastructure, not just the applications, is being validated quarter by quarter.

The Secular Bull Market Context

Jurrien Timmer at Fidelity has tracked equity market cycles carefully for decades. When he describes this as a 17-year secular bull market, he is placing the current period within a larger framework: long periods of equity appreciation, punctuated by corrections and crises, but sustained by compounding corporate earnings growth over time.

Seventeen years in. That does not mean it cannot end. It means the structural forces that drive long-term equity appreciation, productivity gains, technological innovation, capital formation, have been operating consistently for a very long time. And the current earnings data suggests those forces are accelerating, not fading.

Source: Fidelity Weekly Market Pulse, Jurrien Timmer, May 4, 2026

What This Means for Long-Term Investors

Every week in 2026 has produced a reason to be cautious. Hormuz. Tariffs. Jobs data. Court rulings. Each event, in isolation, can feel like a signal to reduce risk.

But here is the thing about the broken clock: it is right twice a day. If you have been waiting for the right moment to reduce equity exposure and missed the market’s recovery, you know how costly that caution has been. The S&P 500 is up 6.02 percent year to date. The TSX is up 7.67 percent. The NASDAQ is up 8.25 percent.

Source: Fidelity Weekly Market Pulse, May 4, 2026

The investors who stayed invested, who used volatility to add rather than subtract, are ahead. That is not always the outcome. But it has been the outcome consistently in markets supported by strong earnings.

For Cross-Border Investors Specifically

If you are managing a portfolio split between Canadian and US assets, this earnings environment has some specific implications.

The US technology sector, particularly AI infrastructure plays, is delivering on its growth thesis. Q1 EPS revision to 26 percent includes material contribution from technology and cloud. If your US equity exposure is underweight technology relative to the index, you may be leaving returns on the table.

The Canadian market is delivering strong earnings across energy, financials, and technology (see Shopify’s 88 percent operating income growth). The Canadian earnings story is not dependent on AI alone. It is diversified across sectors that are performing.

The rate environment in both countries, Fed at 3.50 percent, BoC at 2.25 percent, does not currently favour significant fixed income extension. Equities, supported by real earnings growth, remain the more compelling allocation for long-term investors with appropriate risk tolerance.

Source: Fidelity Weekly Market Pulse, May 4, 2026; Bank of Canada; Federal Reserve

The Practical Question

The question I hear most often when markets are volatile is: should I be doing something?

Here is how I think about it. The goal of portfolio management is not to eliminate noise. It is to capture the meat in the middle: the bulk of the return, without requiring perfect timing on entry or exit.

When earnings are growing at 26 percent, when AI capex is adding measurably to future EPS, when a secular bull market has proven durable through multiple crises, the best answer to “should I be doing something” is often: stay the course, rebalance if you are off target, and add on weakness if you have dry powder.

The numbers support that posture. Absolutely.

The Bottom Line

Q1 S&P 500 EPS growth just got revised from 14 to 26 percent. AI capex is adding to 2026 earnings, not reducing them. The secular bull market is 17 years in and supported by real fundamentals.

The noise this week was real. The signal underneath it was also real.

Stay invested. Stay disciplined. Let the compounding do the work.

Sources: Fidelity Weekly Market Pulse (Jurrien Timmer), May 4, 2026; Raymond James, The Open, April 30-May 8, 2026; Bloomberg Earnings Data, Q1 2026; YCharts, May 8, 2026; Bank of Canada; Federal Reserve

Sartorial Wealth Inc. provides cross-border wealth management, tax optimization, and estate strategy for individuals moving between Canada and the United States. This post is for informational purposes only and does not constitute investment advice. Please consult your advisor before making portfolio decisions.