Rising costs risk cutting into companies' bottom lines

Summary

• S&P 500 company mentions of "material costs" reached their highest level since mid-2022 as of September 30, 2026.
• Small & mid-sized firms exhibited profitability growth in the third quarter despite rising input costs.
• Rising input costs pose risks to companies with squeezed margins, particularly as the holiday season approaches.
• Cost pressures may emerge in distribution & inventory during the upcoming holiday season.
• Larger companies benefit from dedicated logistics contracts & greater purchasing power.
• Smaller companies are more exposed to spot-market transportation costs & fluctuations in freight pricing.
• The data source for S&P 500 mentions is Bloomberg & BofA Global Research.