The Week in Numbers: Tariffs Impact Earnings and US GDP Falls

Tariffs Disrupt Global Earnings Season

• 🌎 Around 40 firms worldwide revised or withdrew their forward guidance during the first quarter due to the impact of US President Donald Trump's tariffs.
• 🚗 Major auto companies like General Motors, Volvo, and Mercedes-Benz were among those that abandoned their outlooks.
• ✈️ Most US airlines and tech giant Samsung also ditched their forecasts.
• 📦 United Parcel Service (UPS) announced 20,000 job cuts, citing the significant impact of trade policies.

US Economy Contracts Unexpectedly

• 📉 US GDP fell by 0.3% in the first quarter, marking the first economic contraction in three years.
• 😟 This downturn deepened concerns about the effects of President Trump's tariffs on the broader economy.
• 🗣️ President Trump deflected blame, urging patience and predicting future economic growth driven by his tariffs.

Corporate Financial Impacts

• 💰 General Motors warned that tariffs could cost it up to $5 billion and reduced its annual profit outlook.
• ☁️ Meta exceeded revenue expectations by $42 billion, despite broader economic uncertainties and fears of an AI slowdown.
• 📈 Microsoft also reported stronger-than-expected quarterly growth, largely driven by its Azure cloud division.
• 📱 Apple cautioned that tariffs are expected to cost it an additional $900 million this quarter, as it works to diversify its supply chain away from trade war impacts.