Corporate earnings have been growing at a blistering pace. Here’s why that’s not likely to last.

The recent surge in corporate earnings growth has been impressive, but a closer look reveals that it's unlikely to be sustainable. Several factors have contributed to this rapid growth, including a strong economy, low interest rates, and a boost from tax cuts. However, as the economy begins to normalize and interest rates rise, companies will face increasing costs and decreasing profit margins.

This matters because investors have been relying on earnings growth to drive stock prices higher. If earnings growth slows, as expected, investors will need to reassess their expectations for future stock performance. The current pace of earnings growth is also unsustainable because it's largely been driven by one-time factors, such as tax cuts and cost-cutting measures, rather than organic growth.

Looking ahead, investors should watch for signs of slowing earnings growth and how companies respond to increasing costs and decreasing profit margins. Key indicators to monitor include upcoming earnings reports, economic data releases, and central bank actions. As the economy continues to evolve, investors will need to adjust their strategies to account for a more sustainable, and likely slower, pace of earnings growth.

Originally reported by marketwatch.com. ExpoNews adds analysis for finance & markets readers.