Stocks are set to be pummeled by more volatility as companies head into a season of weak earnings, Charles Schwab says

Charles Schwab warned that the stock market could be in for a rough ride through the rest of the year as companies head into a weak earnings season.

That's a recipe for more pain in the stock market in the final stretch of 2022, especially since more companies could miss earnings estimates in the following quarter, the firm said.

According to analysts, the weakness in expected earnings growth is early in its trip to an ultimate negative.

In the middle of last year, the rate at which S&P 500 companies beat earnings expectations was over 20%.

As earnings reports roll in, that could decline even further. Excluding the energy sector, which has raked in massive profits, earnings growth in the S&P 500 will shrink by 2% over the third quarter, down from what it was in June.

It's bad news for investors and a sign of more uncertainty. Analysts said that returns on stocks that missed earnings estimates plummeted in the last quarter.

The Federal Open Market Committee meeting this week is expected to lead to a hike in the federal funds rate. The policy decision could lead to another slide in stock prices, particularly for growth heavy stocks, which make up a larger share of the market today than they did in the last inflationary period.

There is less upside for profit margins if interest rates continue to rise and earnings growth continues to slow.