Uncertainty Looms Over Q1 Earnings Season Amid Tariff Impacts

Market analysts forecast that upcoming Q1 earnings will be heavily influenced by tariff-induced uncertainties. Major corporations, notably Walmart and Delta Air Lines, may withdraw or lower their earnings guidance, impacting stock prices in the near term.

Date: 10-04-2025

AI Rating: 5

**Impact of Tariff-Induced Uncertainty**: The upcoming Q1 earnings season for the S&P 500 suggests a significant focus on the guidance provided by companies due to emerging tariff and macroeconomic challenges. The downward revision of earnings expectations by major companies like Walmart and Delta is a clear signal of the adverse impact tariffs and consumer behavior are having on earnings forecasts. As per the report, Walmart has announced a reduction in its earnings guidance due to unfavorable merchandise mix and necessary price investments, while Delta has also withdrawn its full-year outlook amid concerns over slowing corporate sales. These changes are critical insights for investors as they could indicate a broader trend of declining earnings growth across multiple sectors.

**Earnings Growth Expectations**: The report anticipates a +5.8% growth in total Q1 earnings for the S&P 500 compared to the same period last year, with revenues expected to rise by +3.8%. However, the revision trends are downwards, raising concerns about whether actual earnings performances will meet these optimistic predictions. The expectation for tech sector earnings growth at +12.5% for Q1 is a positive highlight, yet potential pressures from broader economic factors could dampen this performance. The fact that 8 of the 16 Zacks sectors are expected to report positive growth is somewhat reassuring, but the overall sentiment appears to be overshadowed by recurring negative revisions.

**Key Takeaways for Investors**: As the earnings season progresses, it will be crucial for investors to closely monitor the guidance issued by corporations, especially given the volatile backdrop influenced by tariffs and economic conditions. The current climate suggests the need for a cautious approach, especially for sectors experiencing downward revisions. Investors should be prepared for potential volatility in stock prices due to these earnings announcements, and greater emphasis should be placed on companies that can effectively navigate these obstacles.

Stocks: WMT DAL