A pervasive element in the brew of Sword & Sorcery literature is horror, but not the entirety of the horror genre, only certain elements. After all, horror and S&S are doing different things, so even with the same trappings they will end up with different effects. But is the horror element a necessary one?
I would say it is. After all, when we address the horror in S&S, we are talking about a particular kind. Howard was a pen pal with Lovecraft, and so it was that peculiarly Lovecraftian vision that was worked into the alloy that made up the earliest Sword & Sorcery fiction. S&S was a pulp form, and Lovecraft was highly influential on pulps in general, but especially writers like Moore and Leiber, who took up the S&S torch.
So the feel and tropes of Lovecraftian horror were there from the beginning, and they have stayed because they actually fit really well into what the genre is trying to do. There’s not going to be psychological horror – S&S is not by nature an introspective genre, and that kind of inner landscape would not suit it so well. You will also find a lot less of the old-fashioned ghost story, because S&S is an action-oriented genre, and so does not lend itself well to the slow build and intricate backstory you need for a ghost tale.
But Lovecraftian horror posits a universe of hidden races, monstrous gods, and exotic antiquity. It plays on the unseen gulfs of time that existed before history and our fears of what we might not know about the world we see. It also, most importantly, depicts a completely amoral universe. Lovecraft’s innovation was to invent the idea of ancient evils that are mostly evil by being completely alien. His monstrous gods don’t hate us, they just don’t care either way. Interfacing even partially with these deathless entities will drive a human being insane, simply because they are so different from us.
All of this fits in very well with the ideas and ethos of the Sword & Sorcery tale. The gods of an S&S world must by necessity be either imaginary or evil, and a kind of evil that has little to do with the traditional philosophical/religious ideas. A lot of fiction at the beginning of the century was trying to explore evil in this new context divorced from rigid religious values, and S&S was no different. Lovecraft made up an idea of gods that were not evil because of the Devil or some such bullshit, but because they predated such paltry ideas and concepts.
The difference in the use of these tropes in S&S is that you can’t use the same kinds of protagonists for them. Lovecraft’s narrators were often pallid, bookish types who would faint at the sight of blood, and were quite impossible to envision as the hero of a violent action story. Also, while an aura of doom pervades a lot of S&S, it is distinctly different from the nihilistic hopelessness found in a pure horror tale. A Sword & Sorcery hero may lose the battle, but he has to get a few good hits in first. More often, even if they die, the S&S hero will win a kind of victory, or at least a reprieve. And it is worth noting that no swaggering barbarian hero will ever go mad just from the sight of the monster he has come to face.
Because that is the difference with the horror elements in Sword & Sorcery – the evil is there to be fought. The backdrop of antiquity and prehuman horror creates an aura of danger and adds to the feel of a grim, violent world unlike our own. It stacks odds against the protagonist in the same way the ancient, deathless monster does, but they are all there to provide a backdrop for heroism. A Lovecraftian protagonist is never a hero, always a victim, always mad and helpless and screaming. A S&S protagonist is there to fight, to kill, to stand against the unkillable evil and swear to kill it, or die trying.