What a whirlwind the first half of the year was. Things got off on a steady foot at the beginning of 2020 despite what was (at the time) only a nagging coronavirus outbreak in China.

But when the COVID-19 pandemic made landfall in the United States in February, our piece of the world was rocked. The S&P 500 tumbled 35% from February's peak to March's trough, as investors feared countrywide shutdowns would prove catastrophic to corporations.

Much of that dust has settled in the meantime, and much of the S&P 500's loss has been reclaimed. There's still plenty of uncertainty to go around, but we at least have a vague idea of the broad market's condition.

The three charts below help fill in additional details on that broad picture.

Investor thinking at a desk while looking at a laptop

Image source: Getty Images.

The earnings headwind should be short-lived

Most investors have correctly presumed the fallout from COVID-related shutdowns would affect earnings. Most investors haven't quite been able to pinpoint exactly what that impact might be. Coming up with a fairly finite number isn't out of the question though. Standard & Poor's estimates the S&P 500's second-quarter per-share earnings figure will roll in somewhere around $22.69.

Incredibly enough, that's actually a bit better than the first quarter's bottom line of $19.50 per share. Don't be too impressed though. First-quarter earnings were down nearly 50% year over year. The second quarter projected bottom line will likely be lower to the tune of 43%.

That should be the worst of the headwind, however. While it will take some time to fully dig our way out of the hole we fell into as the first quarter turned into the second quarter, analysts are modeling an eventual full rebound. This optimistic outlook explains much of the near-50% rally from March's lows. Stocks are largely valued based on where they're going rather than where they've been.

The earnings tumble suffered during Q1 will be curbed in Q2, before an impressive recovery

Data source: Standard & Poor's. Chart by author.

Not all sectors are in the same trouble

The anticipated 43% lull in second-quarter earnings for the S&P 500, however, begs one question: where's the bulk of the weakness coming from? The answer may surprise you.

The graphic below identifies exactly where each penny of the S&P 500's "per share" earnings comes from, broken down by sectors. Unsurprisingly, technology powerhouses like Microsoft and financial names such as Bank of America chip in more than their fair share, as do healthcare stocks. At the other end of the spectrum, telecom and consumer staples aren't game-changers.

The estimated breakdown for the second quarter of 2020 is conspicuously different than the past couple of years' worth of quarters, though. Namely, industrials are expected to effectively break even for the second quarter, and discretionary names along the lines of Carnival are likely to collectively book a loss.

Financial names are bouncing back nicely after a rough first quarter, and while technology stocks have done better, all things considered they're doing pretty well now. Real estate, staples, materials, and healthcare names are expected to post relatively typical numbers.

Discretionary, industrial, and financials stocks are the market's weakest links for Q2 of 2020

Data source: Standard & Poor's. Chart by author.

Take the second-quarter earnings breakdown with a grain of salt. The world's never been in its current situation before, and analysts can only guess based on what they can see and know right now. The situation, however, remains very fluid.

Valuations are rich, but not out of control

Finally, while the earnings struggle that unfurled during the first and second quarters is concerning, bear in mind that the February-March pullback made much of the necessary adjustment stocks needed to reflect those lowered numbers. On a trailing 12-month basis, the S&P 500's price-to-earnings ratio is a forgivable 26.9. On a forward-looking basis, the index is an even more palatable 23.0.

Those numbers assume the S&P 500's constituents will collectively earn the aforementioned $22.69 per share for the second quarter, and then go on to grow their bottom lines into 2021 as Standard & Poor's has modeled. But, even with all the challenges ahead, it's difficult to argue most corporations -- at least in the United States -- have adjusted to the current state of affairs.

The S&P 500's trailing P/E ratio stands at an unusually high 26.9

Data source: Standard & Poor's. Chart by author.

Those are still frothy valuations by historic standards, but not so frothy that growing into them is out of reach for years to come. We've seen worse.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.