The S&P 500 has rallied 11% year-to-date, and Wall Street is officially out of 0 the third-quarter earnings season begins, traders expect Corporate America to prove that the rally is 1 to Bloomberg Intelligence, analysts are projecting 7.4% profit growth for 2 this quarter, up slightly since mid-August, while the MSCI All-Country World Index is also heading toward an all-time 3 surge, driven by the AI investment boom, has inflated valuations and expectations 4 that optimism is running into 5 S&P 500 has soared 32% from its April low, yet tensions over tariffs, worries about a tech bubble, and a still-fractured global trade system are weighing on 6 Stovall, chief investment strategist at CFRA, said: “Investors will be very unforgiving of any kind of slip, whether it’s a slip in earnings or a slip of the tongue when talking about expectations.” The pressure now shifts to the nation’s biggest players as JPMorgan Chase & 7 other top banks kick off results next week, followed later by the megacap tech giants whose gains have powered most of this rally.
Trump’s tariffs hammer stock profits – Investors demand clarity from companies Trade is once again the story of the 8 Donald Trump announced plans for a new 100% tariff on Chinese goods, plus export controls on “any and all critical software,” to begin November 9 decision hit markets immediately, with analysts warning that months of elevated tariffs are already cutting into corporate 10 Bank AG estimates that S&P 500 earnings growth would have been about one percentage point higher this quarter without those 11 exporters, who shipped $1.3 trillion in goods to the 12 year, have so far weathered the hikes, though many fund managers think that’s due to front-loaded exports before tariffs fully take 13 Europe, earnings expectations are already being trimmed.
A Citigroup index shows estimates have been falling steadily since mid-March, lowering the bar for upcoming 14 the same time, the AI spending boom hasn’t 15 forecasts a 67% jump in global capital expenditures this year to $375 billion, with Societe Generale noting that the capex-to-sales ratio is at a 25-year 16 any hint of a slowdown could shake investor 17 O’Rourke, chief market strategist at JonesTrading, said , “A slowdown would be like slamming on the brakes. A lot of names would enter a real profit-taking mode.” Layoffs, currency swings, and China’s weak growth add pressure With the federal government shutdown blocking new employment data, investors are watching earnings calls for signs of workforce 18 Mayfield, strategist at Robert 19 & Co., warned that layoffs could expose deeper weakness in the labor market and weigh on consumer spending.
“If you see enough of those start to stack up,” he said, “it’s a signal the labor market is weaker than expected.” Currency trends are also shaping Q3 20 21 rallied against major currencies but remains well below its 2022 peak. That’s a relief for exporters and multinationals converting foreign income into 22 Buchbinder, chief equity strategist at LPL Financial, said the softer dollar, along with AI-driven capital investment, could add “another 5–7% upside” to profit forecasts and lift earnings at a low-teens pace this 23 Europe, the stronger euro remains a 24 Cruz, strategist at Panmure Liberum, said the recent dip came too late to benefit Q3 reports, especially for construction, healthcare, and technology firms that generate nearly 60% of sales abroad.
Meanwhile, China’s CSI 300 index is up 17% this year, but its Q3 profit outlook is flat, with just 3% growth 25 upcoming meeting between Trump and Xi Jinping is now uncertain, as both countries tighten restrictions on tech and material flows. Still, there’s a glimmer of 26 Sachs believes China’s corporate downgrades are slowing as factory activity and industrial profits 27 analysts also pointed to Beijing’s efforts to tackle involution, the destructive domestic price wars that have plagued 28 you're reading this, you’re already 29 there with our newsletter .
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