Earnings are set to disappoint, and it’s not just about outlooks. The damage is already done. Some are wondering why the Russell 2000 is getting hammered while tech stocks are the focus of the pullback. Others debate whether earnings themselves will be bad or if only guidance will suffer. The answer is simple: both are going to take a hit.
Tariffs kicked in at the start of the month and then escalated further. Businesses didn’t just get a warning—they got a bill. Companies have been forced to pay significantly more for the same shipments they received last quarter. The result? A direct and unavoidable blow to profits. Some rushed to front-load inventory before the tariffs hit, but that buffer is gone. Now, they’re paying full price, and it’s already showing up in the numbers.
This isn’t just speculation. A WSJ piece highlights real case studies of companies grappling with soaring costs. Those hoping tariffs would be a slow-burn issue were dead wrong. The reality is hitting balance sheets now, and there’s no easy way out. Earnings season is about to reveal just how painful it’s been.
