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2d ago

U.S. Banks Kick Off Q2 Earnings as Tariff Threats Cloud Outlook

President Trump’s planned 30 percent tariffs on the European Union, as well as Mexico, set for August 1 widen cost pressures ahead of a projected drop in S&P 500 EPS growth to around 4 percent.

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A strong employment gain last month makes a Bank of Canada rate cut unlikely in July, analysts say.

Overview

  • Major banks including JPMorgan Chase, Bank of America and Morgan Stanley report second-quarter results this week, marking the start of the earnings season.
  • Goldman Sachs economists say consensus forecasts see S&P 500 companies’ EPS growth slowing to about 4 percent year-over-year, down from 12 percent in Q1.
  • President Trump’s tariff announcement has injected fresh uncertainty into corporate guidance as import costs face steep increases starting August 1.
  • Deutsche Bank projects tariffs will shave roughly two percentage points off S&P 500 Q2 earnings; Goldman Sachs expects firms to pass 70 percent of those costs to consumers.
  • Investors will also weigh upcoming reports from PepsiCo, TSMC and Netflix alongside U.S. CPI, retail sales, housing data and Federal Reserve commentary for more economic clues.