We started 2018 with companies weighing the benefits of tax reform, along with tariffs and rising interest rates after seeing record profits in 2017. Early in the year, we experienced corrections, declines of 10% or more in every major stock index. Despite lots of volatility often driven by trade and tariff fears, we've seen all indexes recover substantially. Starting from those lows reached in February/March and now having all major indexes in positive territory for the year. Earnings have simply been amazing thus far in 2018. Last quarter earnings growth came in at 25% year over year. It's hard to ask for much more than that and here we are in the early stages of the second quarter earnings reporting season.
For companies that have reported so far in this season, largely financials, the news has been outstanding. Coming into earnings season the average estimate for earnings growth was 20% year over year. Here's where we stand so far. Only 5% of companies have reported, 89% have reported positive earnings surprises, 85% have topped sales targets and earnings growth is averaging 19.9%.
Expectations are high and once again companies are delivering. We're pacing the second-best earnings growth since 2010 out of the gate with record overall earnings for the quarter. We're now clearly seeing the impact of the Tax Cut and Jobs Act washing through in these reports and projections going forward. There's still lots of room for optimism.
Market reaction over the short run is unpredictable but fundamentals matter most overtime and the fundamentals of our businesses are about the best they've ever been.
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