Earnings Watch: JPMorgan and Delta Air Lines report this week — but ‘you can throw most forecasts out the door, if this tariff rate stays on for an extended period of time,’ one analyst says

JPMorgan reports quarterly earnings on Friday.

Last week, President Donald Trump described his sweeping new tariffs as a form of “liberation.” But as fears of steeper price increases and an economic downturn grow, investors and corporations have been asking: Liberation from what?

Starting this week, the some of the nation’s biggest companies, led by Delta Air Lines Inc. and JPMorgan Chase & Co., will weigh in on the months ahead when they report first-quarter results, amid dimming expectations on Wall Street.

Those tariffs — which include a 10% baseline global duty and steeper taxes on imports from nations like China and Vietnam — have sent investors, caught off guard by the magnitude, scrambling. And they’ve left analysts wondering about how other nations might punch back, and how long the levies might remain in place as the U.S. leans on them to wrest concessions and remold global trade.

“The U.S. tariff rate on all imports is now around 22%, from 2.5% in 2024. That rate was last seen around 1910,” Olu Sonola, head of U.S. economic research at Fitch Ratings, said in emailed commentary.

“This is a game changer, not only for the U.S. economy but for the global economy,” he added. “Many countries will likely end up in a recession. You can throw most forecasts out the door, if this tariff rate stays on for an extended period of time.”

As for first-quarter earnings forecasts, Wall Street still expects per-share profit from S&P 500 companies to increase 7% year over year, according to a FactSet report on Friday. That would be the seventh straight quarter of growth, for a period that ended just before Trump’s “liberation day” tariffs were announced on Wednesday.

But even before last week’s market meltdown, analysts had tempered that profit forecast over the past few months as the administration’s previous tariffs, sticky inflation and government spending cuts stirred deeper anxieties. Over roughly the past three months, Wall Street analysts cut their first-quarter earnings-per-share estimates more than normal.

Those estimates fell by 4.2% from Dec. 31 to March 31, according to the FactSet report. That decrease was bigger than the average when measured over five-, 10- and 15-year periods, albeit on par with the 20-year average, FactSet said.

“It is quite unique, because coming into the year, the expectation was for a fairly notable acceleration and broadening of the growth outlook for these S&P 500 companies,” said Sheraz Mian, director of research at Zacks. “So, a pretty sharp change in sentiment about the macro picture in a pretty short period of time.”

When Trump won the U.S. presidential election last November, Wall Street was quickly upbeat about the prospect of tax cuts and deregulation. Stocks rallied.

But since then, harsh winter weather and wildfires have kept more people from shopping. Consumer confidence has sunk as Trump digs in on trade policy and efforts to shrink the government. Manufacturers have shown more pessimism. Some data have shown that sentiment among wealthier consumers — who are likelier to be more sensitive to stock-market moves — has turned south.

Mian said that more companies, as their earnings roll in, could simply pull their financial forecasts altogether.

“There is simply not enough visibility for these companies to tell us precisely how their June quarter will unfold, how their September or the rest of the year will be,” he said.

Trump and the people in his orbit have described the tariffs as a tool to undo decades of trade policies that hollowed out U.S. manufacturing while benefiting Wall Street and large corporations, as employers shifted jobs overseas in pursuit of lower costs. By sticking those extra taxes on imports, they hope, companies will make more things in the U.S., restoring jobs and putting greater pressure on other nations to bend to the U.S.’s preferences.

But analysts and industry groups have made dire predictions about the impact of Trump’s latest tariffs and the squeeze they risk putting on consumers and the rest of the world. Nobody seems to know exactly how the Federal Reserve, which adjusts borrowing costs to heat up or cool down the economy, might respond.

Clothing, cars, food, alcohol, some insurance, and other goods and services could get more expensive — further stretching shoppers and the retailers selling things to them, as businesses weigh which costs to stomach themselves and which to pass on to consumers. If tariffs send broader convulsions through the economy and prices swell, they could reignite the debate around how much companies are taking advantage of the disruptions to boost their own margins.

Then, there’s the impact on business plans. Nintendo Co. Ltd., for instance, has delayed preorders for its Switch 2 console “to assess the potential impact of tariffs and evolving market conditions,” although its launch date for June is unchanged. The Wall Street JournalreportedFriday that Klarna Group has put its IPO on hold, and that StubHub Holdings’ roadshowhas been shelved.

Executives, on earnings calls in the weeks that follow, will likely have more to say on all of the above.

For banks, which start reporting results this week, the tariffs — and the risk of a pullback from businesses and consumers — will raise questions about loan growth, deal-making, trading and bill payments. For Big Tech, which was already facing questions about whether the industry has overspent on artificial intelligence, the tariffs have scared even more upbeat analysts.

“We have spoken to hundreds of investors, tech CEOs, supply-chain experts around the world this week to gauge the Trump tariff armageddon unleashed this week,” Wedbush analyst Dan Ives said in a note on Saturday. “In a nutshell, if these tariffs (in current form/rates) hold there is no debate … it would set the U.S. tech world back a decade in our opinion while China is the clear winner.”

Services of all kinds could get more expensive as businesses try to make up for rising costs for equipment. Companies could get more granular as they try to cut costs — and artificial intelligence might not be shielded as IT managers take a closer look at their budgets.

Shannon Copeland, the chief executive for SIB, a firm that helps companies make spending decisions using experts and AI technology, said he’s heard deeper anxieties from customers, and a deeper sense of urgency to find ways to cut costs, as tariffs sink in. The need to be more precise on spending — and taking a closer look at things like credit-card and bank fees that are easier to ignore even for bigger, successful companies — have become more important, he said.

“Some of our clients have said, ‘We already had innovation pressure, competitive pressure. We had inflation pressure. We already have training [and] talent-retention pressure,’” Copeland said. “Tariffs are adding on to that.”

Some companies, on recent earnings calls, have highlighted their existing factories in the U.S. and their flexibility to shift production elsewhere. But that’s easier said than done, said Nirupama Rao, an assistant economics professor at the University of Michigan and a scholar at the Washington Center for Equitable Growth.

“It’s hard to get firms to reshore industrial activity with tariffs,” she said. “Let’s think of a firm deciding where to put a plant — a plant that will live for 20 to 30 years. That firm’s focus will be on their long-term costs.”

This week in earnings

Before concerns about tariffs, there were concerns about higher egg prices. Egg producer Cal-Maine Foods Inc. reports during the week. As shoppers brace for higher prices, results from Levi Strauss & Co., Dave & Buster’s Entertainment Inc. and beer distributor Constellation Brands Inc. could offer a sense of how much room they have left to spend on anything but the basics. Used-car marketplace CarMax Inc. also reports.

The call to put on your calendar

JPMorgan Chase: In January, as worries grew over the impact of Trump’s tariffs, JPMorgan Chief Executive Jamie Dimon said to “get over it,” arguing the duties were worth a small bump higher in prices if they strengthened national security. But in March, he said that even if tariffs don’t change consumers’ behavior, they might change corporate America’s behavior, adding: “Uncertainty is not a good thing.” Were the “liberation day” tariffs too much? We’ll see when the bank reports results on Friday. As always, the results will also offer a snapshot of the wider U.S. economic backdrop.

Fellow big banks Wells Fargo & Co. and Morgan Stanley also report Friday.

The number to watch

Delta’s 2025 profit forecast: Last month, Delta Air Lines cut its first-quarter outlook, saying “macro uncertainty” had dampened consumer confidence and corporate travel. When the airline reports earnings on Wednesday, analysts may be watching for more extensive damage. Raymond James analyst Savanthi Syth, in a research note last week, said she expected airlines to cut their 2025 profit forecasts. Shares of the airline, as well as those of United Airlines Holdings Inc., were theworst S&P 500 performers in March.