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Tariff impacts were largely absent from first-quarter earnings reports.First-quarter earnings season is winding down this week. Most market watchers would agree that one issue has loomed large over this round of results.
Of the 451 companies in the S&P 500 that hosted earnings calls between March 15 and May 15, 381—or 84%—have mentioned “uncertainty,” according to a recent analysis from FactSet Research. The only other time in the last 10 years that more executives have discussed uncertainty was during the depths of Covid-19 lockdowns in the first quarter of 2020, when 393 did so. =
President Donald Trump trade policy has been a big reason for the unease: “Tariff” has been mentioned on 91% of earnings calls in the last two months, more than any other quarter in the last decade, according to a separate FactSet report published Friday.
The effects of trade policy, however, are yet to to be seen, Deutsche Bank analysts noted Monday, as most U.S. companies didn’t see much tariff impact in the first quarter. “In many cases, it was too early to see a direct impact and trends which had been in place previously largely continued,” they wrote.
That’s one reason first-quarter earnings have handily exceeded expectations. The S&P 500 is on track to post a second consecutive quarter of double-digit earnings growth.
The Trump administration's decision to pause nearly all of the tariffs announced in early April could mean "tariffs" and "uncertainty" continue to dominate the conversation in the next round of earnings calls starting in July. Investors and executives are hoping that bilateral deals like the one struck earlier this month with the U.K. will provide some clarity.
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