By Caroline Valetkevitch
       NEW YORK, April 11 (Reuters) - Big technology-related
company earnings are expected to again lead S&P 500 profit
growth in the upcoming U.S. reporting period, which could refuel
optimism for stocks after a weak start to April. 
    Interest rate outlook worries hang over the first-quarter
earnings season, with the expected timeline for Federal Reserve
rate cuts being pushed back as the economy remains robust.
    Analysts expect S&P 500 companies in aggregate to report
earnings increased 5% in the first quarter from a year earlier,
according to LSEG data, after much stronger-than-expected
earnings growth of 10.1% in the fourth quarter 2023 led by gains
in megacap tech.
    Earnings from some big U.S. banks unofficially start the
reporting period on Friday. From there, the season shifts into
high gear, with results from Netflix         , Procter & Gamble
      , UnitedHealth         and Travelers Cos         all due
next week.
    Earnings for the communication services sector          ,
which includes such names as Alphabet          , are forecast to
have risen 26.7% from a year ago. The technology sector
         , which includes Nvidia         , Apple          and
Microsoft         , is expected to have climbed 20.9% in the
first quarter, according to LSEG data. 
    Communication services led earnings gains in the fourth
quarter of 2023, with 53.3% year-over-year growth, while
technology earnings grew 24.2%.
    Investors remain optimistic about artificial intelligence.
The Nasdaq         in late February reached a record high close
for the first time in over two years, as AI fever has driven
rallies in Nvidia and other tech heavyweights.
    "We see a healthy capex cycle ahead from both AI and other
mega projects... benefiting not just semis, but also power and
commodities," BofA Securities strategists wrote in a research
note Thursday.
    The S&P 500        has hit a string of record highs since
late January. It is up roughly 9% year to date, but down about
1% so far for April.
    The U.S. Labor Department this week reported the third
straight month of strong consumer price readings. Some investors
now feel the Fed might delay cutting rates until September.
    Growth stocks tend to be more sensitive to higher interest
    "I would rather have a strong economy than one that requires
stimulus from the Federal Reserve," said Oliver Pursche, senior
vice president and advisor for Wealthspire Advisors in Westport,
    But, during earnings season, he said, "we're gong to start
hearing more and more about consumer debt and carrying costs of
debts. Spending growth is outpacing wage growth, and that's not
    Of the S&P 500 sectors, energy        , materials          
and healthcare          are expected to have had the biggest
declines in earnings year-over-year in the first quarter.
    But analysts expect the first quarter to be the smallest
increase this year for earnings, with profit growth for all of
2024 seen at 9.8%, based on LSEG data. 
    "Operating leverage should drive margins further as demand
recovers," BofA Securities strategists noted.

 (Reporting by Caroline Valetkevitch; Editing by Alden Bentley
and David Gregorio)