"Economic Outlook at Its Worst Due to Trump"... S&P 500 Companies Issue Stark Warnings

U.S. Companies Face Worst Economic Outlook Since Financial Crisis
Only 9% of S&P 500 Firms Raise Earnings Forecasts for This Year, While 27% Lower Expectations

Concerns over a slowdown in the U.S. economy are growing due to President Donald Trump's broad tariff policies and his pressure on Federal Reserve Chair Jerome Powell to cut interest rates. The economic outlook for American companies has also dropped to its worst level since the financial crisis.

On April 23 (local time), Bloomberg News reported, "An analysis by Bank of America (BofA) of early corporate conference calls during the recent earnings season found that the ratio of positive to negative comments about the macroeconomic environment has fallen to its lowest level since 2009, during the financial crisis."

The economic outlook for American companies has dropped to the worst level since the financial crisis. Photo shows a view of New York City. Photo by Pixabay

According to Bloomberg Intelligence, 27% of S&P 500 companies this quarter expect their performance to deteriorate this year. Only 9% of companies expect improvement.

During earnings season, companies typically express confidence in their business outlook, leading to a higher number of positive remarks. However, as concerns about the economic impact of the trade war triggered by President Trump have intensified, pessimism has increased significantly, with the S&P 500 index dropping 15% from its February peak, reflecting worsening market conditions. Market strategist Jim Paulsen stated, "Almost every company CEO is revising their forecasts downward," adding, "Warnings about the corporate environment are also increasing."

BofA diagnosed that "as companies have recently refrained from issuing earnings forecasts, there will be a period of 'information blackout' similar to what occurred during the COVID-19 pandemic." Kayla Seder, macro asset strategist at State Street, said, "Given all the uncertainties, it will be difficult for companies to provide earnings forecasts," and predicted, "For investors, two-way risks and volatility will persist until tariff negotiations become more concrete."

Meanwhile, on April 22 (local time), the International Monetary Fund (IMF) projected this year's global economic growth rate at 2.8%, 0.5 percentage points lower than its previous estimate. This figure is a decrease of 0.5 percentage points compared to the forecast made in January. The downward revision reflects the impact of the trade war initiated by President Trump's tariffs, which has escalated to a global level. The economies at the center of the trade war, the United States and China, are also expected to take significant hits, with their growth rates projected to fall by 0.9 percentage points and 0.6 percentage points, respectively, compared to previous estimates.