CEOs wary of a jittery US consumer as global tensions intensify

NEW YORK – As the US earnings season gathers momentum, early results are offering a window into the economic and political cross-currents shaping Corporate America’s outlook for the year ahead.

Airlines were among the first to flag risks. Delta Air Lines struck a cautious tone on profits amid geopolitical uncertainty, while United Airlines Holdings warned that global tensions could weigh on travel demand. Meanwhile, executives at consumer staples giants Procter & Gamble and McCormick said shoppers remain cautious.

3M, maker of Post-it notes, roofing granules and electronics materials, fell the most since April after its outlook missed estimates. It said the macro environment remained uncertain for its consumer and auto businesses. Signs of strain are lingering in industrial sectors as reports from distributor Fastenal and logistics company J.B. Hunt Transport Services disappointed investors.

The downbeat commentary stands in contrast to many of the headline economic indicators. Data from 2025 pointed to solid growth and resilient consumer spending. Among S&P 500 Index members that have reported so far, 80 per cent have topped analysts’ expectations as at the close on Jan 22, according to data compiled by Bloomberg Intelligence.

Policy uncertainty “absolutely” overshadows positive news from companies, said Mr Steve Sosnick, chief strategist at Interactive Brokers. “It does make it much harder for management to plan... but what CEO is going to say, ‘the policy instability coming out of the White House is making it very difficult for me to manage my business’?”

Companies are reporting results amid a rare convergence of political disruption and global uncertainty. Stocks are trading at high valuations after the S&P 500 clocked three straight years of double-digit growth, leaving little room for error. 

Corporate executives now face the tough task of laying out their companies’ outlook for the year ahead as President Donald Trump continues to reshape the country’s trade relations and international policy. 

“The environment across our key markets is marked by volatility and continued pressure from inflation, geopolitical and trade uncertainty” and the risk of rising unemployment, McCormick’s CEO Brendan Foley said on a Jan 22 conference call. “Overall consumer confidence remains low.”

Shares of the spice and seasoning maker slid the most in two years after both fourth-quarter earnings and its outlook for the year fell short of expectations.

Procter & Gamble, the maker of Pampers diapers and Tide detergent, noted similar disruptions, though it expects sales will increase in the next six months. Both Procter & Gamble and McCormick said sales were hurt by the government shutdown, which temporarily halted food-aid programmes and weighed on lower-income consumers.

In industrials, companies pointed to lingering demand headwinds. Fastenal’s chief financial officer said the US economy “continued to send mixed signals, especially in the industrial sector.” At J.B. Hunt Transport Services, executives said the freight market remains shaky at the start of the year – even as immigration policy constrains labour supply, a dynamic that would typically support higher shipping rates.

United Airlines said the US military incursion in Venezuela has had a “measurable negative impact” on Caribbean bookings, with CEO Scott Kirby warning that geopolitical risks could disrupt what otherwise appeared to be a strong start to the year. 

The Chicago-based carrier also flagged an outsized hit from Mr Trump’s push to cap credit-card interest rates, reflecting airlines’ deep ties to the payments industry through lucrative co-branded card partnerships – a proposal that earlier in the earnings season sent shares of financial firms lower.

At the same time, parts of Mr Trump’s policy agenda could offer near-term relief for consumers. Investors are betting that outsized tax refunds and potential stimulus measures may help support spending among lower-income households, at least temporarily. The White House has put affordability at the centre of its messaging, from the credit-card initiative to efforts aimed at forcing technology companies to shoulder rising power costs.

“It’s a midterm election year, so the rhetoric has already started to come,” said Mr Eric Clark, chief investment officer at Accuvest Global Advisors. “Who knows if it will actually benefit consumers? It might make them feel like there’s help on the way, which ultimately helps sentiment.” BLOOMBERG