Investors may cheer Q2 earnings, but that isn’t making the outlook for the next quarter any rosier

The second-quarter earnings season has largely been positive for the U.S. stock market, a few high-profile disappointments aside. But increasingly, investors are looking for confirmation that the first half of the year won’t represent a peak for the cycle.

With the season more than half over, investors have begun to look past last quarter’s results and to expectations for what’s ahead. While companies are expected to post strong earnings and revenue growth next quarter, there is some concern that the strong results enjoyed thus far this reporting cycle won’t filter into the next three months.

According to FactSet, third-quarter earnings per share, also referred to as EPS, are seen growing 21.2%. That outlook has edged lower—not higher—over the past several weeks, despite the second-quarter season coming in above expectations. On June 1, about a month before the unofficial start to this reporting period, growth of 22.2% was anticipated for the coming quarter.

It isn’t uncommon for future expectations to be ratcheted up throughout a reporting season, particularly one that demonstrates both growth and which features a high percentage of companies topping expectations, as this one has, with 83% topping profit expectations.

According to Alec Young, managing director of global markets research at FTSE Russell, earnings expectations historically are raised by 300 basis points (or 3 percentage points) over the course of the quarter.

While Young said the second-quarter earnings season isn’t over—meaning that there was still time for forecasts to be lifted—and that the current consensus for third-quarter earnings remained extremely high, the lack of growing optimism about the future has been cited as a potential warning sign.

“This is not what we expected to see, given the magnitude of the beats so far for Q2. Our explanation (for now) it that the revisions will come as more companies report

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