From Nasdaq: 2025-03-14 19:01:00

The Q1 earnings season has already started, with four S&P 500 members reporting results for their February quarters. Another 10 members are set to report this week, including Nike, FedEx, and Accenture. Weak guidance is a concern as uncertainty around the U.S. economy’s growth and tariff policies looms.

Despite the current market weakness and concerns about tariffs, the U.S. economy remains resilient. The Federal Reserve has the capacity to stimulate growth if needed. Earnings growth has been on an upward trajectory, with the previous quarter showing a 13.7% growth rate, the highest in three years.

Early Q1 earnings show a mixed bag, with total earnings up 8.4% for the four reporting companies. However, the market has been unimpressed, with three of the four stocks losing ground post-release. Concerns about the economic backdrop and tariff policies are impacting business and consumer confidence.

Earnings estimates for Q1 are expected to be up 6.0% from last year, with revenue growth of 3.8%. The Tech sector, a growth pillar, is facing negative revisions to estimates due to concerns about the AI investment cycle. Oracle and Adobe reported strong results but weak guidance, reflecting market sentiment shifts.

The evolving earnings expectations for the Tech sector will be crucial, as it has been a key growth driver. The sector is expected to see a 12.6% earnings increase in Q1. Despite negative revisions to estimates, overall earnings growth is expected to remain strong in 2025 and 2026, with double-digit growth projected.

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