It’s the moment when the rubber meets the road for President Donald Trump’s impact on corporate America. Second-quarter earnings season will rev up over the next few days.
Trump unveiled his across-the-board tariffs at the start of the
quarter, and the stock market swiftly tanked. He walked them back, though certainly not completely, and markets have steadily recovered. The Dow is close to a record. The Nasdaq finished last week at an all-time high, and the S&P 500 posted a record high Thursday.
So we know how investors are coping with the new tariff regime so far as the critical Aug. 1 deadline approaches. This week we’ll learn a lot more about how companies are responding as more than 100 names in the S&P
500 present results.
Big technology, the driver of market gains in 2024, will get insight from Google parent Alphabet and electric-vehicle maker Tesla on Wednesday. In theory, Big Tech should still be OK as services aren’t subject to tariffs. Yet Google stock is more or less flat on the year, and its search business may be getting hurt by the growth strength of artificial intelligence, which is replacing traditional search. Tesla is down almost 20%, weakened by CEO Elon Musk’s foray into politics, and the loss of green subsidies.
On Tuesday, soft drink maker Coca-Cola and car giant General Motors will lift the lid on the financial health of the consumer. Are worries about inflation returning? And Trump’s tariffs are designed to protect the domestic car industry. Does GM expect to increase profits faster?
With any luck, two other key issues for markets will be on the back burner. Trump seems resigned to keeping Federal Reserve Chair Jerome Powell in his post for now. And while more trade deals are yet to be
announced—the European Union and India seem most likely—markets can be more certain that tariffs will be even higher in the third quarter than in the second.
American Inc. may have come around to the market’s view that tariffs won’t be that bad. But closely watched CEO commentary will highlight trade speed bumps ahead.
—Brian Swint
*** Join Barron’s senior managing editor Lauren R. Rublin and deputy editor Ben Levisohn at noon today for a conversation with Jack Ablin, chief investment officer and founding partner of Cresset, a $65-billion-in-assets wealth manager and multifamily office. They will discuss how investors can focus on finding good values and tune out the noise Sign up here.
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Elon Musk Is Sleeping in the Office as Tesla Earnings Loom
Elon Musk is back to his old ways, telling his 220 million social media followers he’s back to working seven days a week and sleeping in the office. It should be welcome news to Tesla investors ahead of this week’s earnings report and expected updates on robo-taxis and robots.
- Tesla investors have been on a whirlwind ride. After endorsing and backing President Trump’s candidacy, Musk joined the Trump administration as an advisor on slashing the government, a job that proved controversial. After leaving the role, he picked a fight with Trump and now threatens to form a new political party.
- Musk has to figure out how to turn around flagging Tesla sales. The EV maker sold 721,000 cars in the first half of 2025, down 13% from last year’s first half, stirring fears that Musk’s politics were turning off core Tesla buyers. Wall Street’s expectations were far higher for the first half, according to FactSet.
- Tesla’s 384,000 second-quarter deliveries was the largest percentage drop in company history. Wall Street expects earnings of about 40 cents a share, down from 52 cents in the second quarter of 2024, and revenue of $22.4 billion, down from $25.5 billion in the year-ago quarter, according to FactSet.
- Morgan Stanley’s Adam Jonas expects deliveries to remain subdued in the second half of 2025, down 13% year over year, “highlighting the continued strategic importance of robo-taxi rollout and Optimus advancements.” Second-half sales could reflect buyers pulling forward purchases ahead of the expiring EV tax credits.
What’s Next: While the robo-taxi testing has already started in Austin, Texas, investors will have to wait for Tesla’s artificial intelligence-trained robots, which it expects to start selling next year. They are also awaiting updates on a long promised lower-priced Tesla model.
—Al Root, Bill Alpert, and Janet H. Cho
Tech Also on Deck. Alphabet Is This Week’s Big One.
This week also features earnings from fellow Magnificent Seven company Alphabet and big tech companies IBM and Intel as the artificial intelligence arms race accelerates. Like its Mag 7 peers, Alphabet is plowing billions of dollars into AI projects and infrastructure even as AI threatens its core search business.
- Search demand at Google was likely strong despite the worries, according to Truist analyst Youssef Squali. Alphabet should also post solid results from YouTube and its cloud operations. Despite concerns about AI and search, the business remains Google’s “war to lose,” he said.
- Recently BofA analysts noted that AI-driven chatbots like OpenAI’s ChatGPT and Anthropic’s Claude are giving people alternative ways to find information online. And they noted that Alphabet faces existential questions about its future given the antitrust issues it faces.
- Optimism about Alphabet remains, as some analysts note its deep relationships with publishers and its advertising business, and point out that its nonsearch operations, including its cloud business and the autonomous driving division Waymo are underappreciated, MarketWatch reported.
- Tech stocks have driven the Nasdaq to multiple fresh highs. Michael Arone, chief investment strategist at State Street Investment Management, expects most companies to beat expectations and he forecast second-quarter earnings growth to come in at around 9% yearly.
What’s Next: Expectations have been rising. At the end of June, analysts projected S&P 500 earnings to rise 4.9% in the second quarter from a year ago. That projection is now up to 5.6% as of last week, according to FactSet.
—Liz Moyer
Trump Celebrates Six Month Mark Amid Shrinking Approval
President Trump is taking a victory lap after six months in office, but new polling suggests his major initiatives, including tariffs and inflation, are unpopular. A majority of those polled by CBS News/YouGov disapprove of Trump’s handling of inflation and oppose new tariffs. Half see themselves financially worse off.
