Investing.com -- Goldman Sachs analysts reported that S&P 500 companies showed strong revenue growth in the first quarter, with real revenues excluding energy rising 6.3% year-over-year. The analysis covered nearly all companies in the index.

Companies reported limited evidence of spending slowdowns despite the Iran war and rising oil prices, though management teams expressed concern about the near-term outlook. Goldman Sachs expects real consumer spending growth of just 1.3% in the second half of 2026, citing a low personal saving rate and a 1.1% year-over-year decline in real disposable income reported in April.

The war created upward pressure on input costs and reduced company margins. Goldman Sachs' price announcement tracker, which measures both prices paid and received, reached its highest level since late 2023. Companies most frequently cited higher oil prices as a factor, along with increases in shipping costs, resin-based materials, and computer memory.

AI investment continues to drive capital expenditure growth. Hyperscaler companies increased their 2026 spending plans by 12% during the earnings season to over $750 billion, representing 83% growth versus 2025. Goldman Sachs expects business fixed investment to grow nearly 8% this year, with a 3 percentage point boost from AI-related spending and another 3 percentage point boost from tax incentives in last year's fiscal package.

The labor market has seen limited impact from AI so far, according to the analysis. A small share of management teams mentioned AI when discussing layoffs and hiring freezes. In the tech sector and startups, companies increasingly attributed recent reductions to advances in agentic models, with cuts most frequently affecting operations, data labeling, software development, and customer support roles. Online job postings data from LinkUp showed these same companies increased demand for computer hardware, systems engineering, and research positions.