Tariff clouds loom over US stock earnings season, performance guidance signals the most pessimistic since the financial crisis.

Bank of America Corp's analysis of the first batch of earnings calls shows that the ratio of positive comments to negative comments on the macroeconomic conditions this quarter is significantly below average and is expected to hit the lowest level since 2009. While earnings season is typically a positive for the US stock market, the S&P 500 index has dropped nearly 15% from its historic highs in February as investors brace themselves for the consequences of Trump's attempts to rewrite global trade rules. This is especially true for companies closely tied to profits and the unpredictable economic landscape, such as automakers and transportation companies. Some executives are working to assess the impact of the White House's rapidly changing policies on their businesses. This has further put pressure on the US stock market, with the risk of an economic recession increasing in recent days and the possibility of the market slipping back into a bear market due to inflation caused by Trump's tariffs. Senior market strategist Jim Paulsen said, "Almost every CEO is downgrading their expectations. Corporate comments have become more cautionary." For example, ASML Holding NV ADR (ASML.US) warned that they do not know how to quantify the impact of the tariff announcements that could disrupt the semiconductor industry. Due to global trade uncertainty, Delta Air Lines, Inc. (DAL.US) withdrew its full-year financial guidance, while Kimberly-Clark Corporation (KMB.US) lowered its full-year profit expectations citing uncertainty about the impact of trade wars on its costs. Data shows that so far this quarter, 27% of S&P 500 companies have lowered their 2025 expectations, while only 9% have raised them. Citigroup's data shows that expectations are particularly pessimistic for automakers, with profit expectations for the next 12 months being lowered by an average of about 9% in April. On the other hand, companies that produce essential items such as food and consumer goods often perform better during economic downturns, being among the more optimistic, with their expectations being raised by 1% or more. Citigroup's trading strategy team stated that companies lowering performance expectations are being penalized, while those exceeding expectations are receiving limited rewards. According to the bank's data, companies that lower expectations on average dropped by 4.8% the next day, while those maintaining or raising expectations saw an average increase of 1%. Bank of America Corp predicts that as companies avoid providing guidance, there will be a "potential information vacuum," similar to what occurred during the pandemic period. Dalhousie macro multi-asset strategy specialist Cayla Seder said, "Given all the uncertainty, providing guidance will be challenging for companies. For investors, this means that until the tariff negotiations become more clearly defined, there will continue to be bi-directional risks and volatility may persist."