Is Wall Street Still Too Bearish on the Impact of Tariffs?
Analysts are in ‘Liberation Day’ mode when it comes to the companies most sensitive to the levies.
Earnings season will tell.
Photographer: Michael Nagle/Bloomberg
“Liberation Day” feels like a long time ago. Since President Donald Trump shocked markets with sky-high new tariff rates and a hasty U-turn, the S&P 500 Index has rebounded to all-time highs, and there’s a pervasive sentiment that Wall Street is recklessly ignoring economic risks that haven’t really gone away. Earnings season may, however, provide further fuel for the rally.
Earnings estimates for the more trade-sensitive companies still haven’t rebounded from the very serious hit they took after April 2. Maybe (just maybe) we’ll start to see that happen as companies announce their quarterly results. Though tariffs are no joke for profit margins, many large companies are finding ways to mitigate the impact, and there’s no clear sign that the levies will precipitate the economic downturn that many initially feared.