Mixed economic picture with trade war impact, first-quarter earnings consistent with guidance

From Yahoo Finance: 2025-04-24 06:43:00

The market in April has been struggling to respond to the Trump administration’s trade war. Tariffs announced on April 2, 2025, have been paused, softened, or rescinded. First-quarter 2025 earnings are consistent with guidance, with banks showing strong profits. Companies are providing cautious guidance due to uncertainty, similar to the early 2020 pandemic.

About 12% of S&P 500 companies have reported first-quarter earnings, with financial companies leading. Earnings growth is in the high single digits, in line with expectations. Companies are surpassing street expectations, but the magnitude of surprises is below average. The blended S&P 500 earnings growth rate for 1Q25 is 7.3%.

The economic picture is mixed, with sentiment indicators showing signs of deterioration. Small business optimism has fallen in anticipation of policy changes. Industrial production decreased in March, but overall increased annually. Consumer sentiment indexes have fallen, with investors focusing on inflation reports amidst tariff turmoil.

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