U.S. stock performance warning signals! Over half of American companies expect tariffs to consume at least a quarter of their revenue

According to the Zhitong Finance APP, a business survey shows that American companies are generally extremely worried about the negative impact of the constantly changing tariff policies led by President Donald Trump on their revenues. A recent survey conducted by HSBC Holdings Plc indicates that more than half of the surveyed American companies expect the tariff policies to reduce their overall revenues by at least 25%.

In this business trade survey released by HSBC on Friday, about a quarter of the surveyed American companies stated that their revenue scale will decrease by more than half in the next two years due to the impact of tariff policies on the supply chain.

In contrast, HSBC's survey shows that Chinese companies appear to be more optimistic and more confident about the new round of tariff battles, with only about a quarter of Chinese companies expecting revenues to decline by 25% or more. However, more than half of the companies still expect revenues to decrease by 10% to 25%.

Headquartered in London, HSBC is one of the largest trade finance banks in the world. This report is based on a survey of over 5,700 international companies across 13 countries. The survey found that the widespread concern brought about by Trump's tariff policies is deepening, with two-thirds of the surveyed international companies stating that they have incurred higher costs due to tariffs and trade uncertainties.

"Every company we interviewed is planning to reshape their supply chains, explore new markets, or change their business models," said Vivek Ramachandran, head of HSBC's Global Trade Solutions, in a media interview on Friday. "For decades, companies have generally built supply chains to minimize costs; now, they need to make their supply chains resilient and able to quickly adjust to geopolitical factors. This is a major challenge for all companies globally."

The pessimistic outlook of American companies regarding future performance may be a negative signal for the U.S. stock market, particularly for the S&P 500 index. After experiencing a rapid rebound over six weeks, U.S. stocks still lag behind global markets this year. Bloomberg Intelligence analysts state that to maintain the upward trend and regain their usual leading position, the earnings engines of American companies need to accelerate again.

"Historical data shows that the superior performance of the U.S. stock market relative to international markets has always depended on the ability of U.S. companies to achieve faster earnings growth, and this negative dynamic may challenge the notion of American exceptionalism," said Bloomberg Intelligence analyst Nathaniel Welnhofer.

During the latest earnings season, U.S. corporate executives generally issued warnings about the outlook, attributing rising costs, weak consumer confidence, and low business confidence to the tariffs imposed by the Trump administration on global trading partners. An analysis by Bloomberg Intelligence stock strategists Gina Martin Adams and Wendy Soong shows that the so-called earnings guidance upgrade momentum, which measures the proportion of companies in the S&P 500 index that have raised earnings expectations compared to those that have maintained or lowered expectations, has fallen to its lowest level since at least 2010 In contrast, based on the data disclosed from the latest earnings season, European companies are much more optimistic about Trump's tariff policies than their American counterparts. European firms have delivered results during this crucial earnings disclosure season that are significantly more robust than market expectations, despite the new round of global tariff battles initiated by the Trump administration, providing strong logical support for the "bull market trajectory" in the region's stock market.

According to the latest data compiled by Bloomberg Intelligence, most industries in Europe achieved sales growth and a significant increase in profit margins in the first quarter, driving a year-on-year increase of 5% in overall earnings per share (EPS) for European listed companies, far better than the financial market's original forecast of a 1.5% decline.

Although some European companies faced market sell-offs for failing to meet profit and sales expectations, the overall tone of the new trade war is not concerning. Executives generally emphasize that due to the implementation of mitigation strategies and positive developments in China-U.S. trade, the direct impact of the trade war on the company's financial situation is very limited.

CEOs of various European companies expressed an optimistic tone when discussing the tariff storm led by Trump, focusing more on potential trade agreements between China and the U.S. as well as between the U.S. and Europe. The bright earnings data and positive performance outlook have prompted most Wall Street strategists to upgrade their outlook ratings for the European stock market, and they have begun to anticipate that the bull market in European stocks will continue for the remainder of this year.

Goldman Sachs' strategist team also significantly raised its forecast for the growth rate of earnings per share in the European stock market from negative growth (i.e., -7% in 2025) to 0% last week, and expects a 4% growth in 2026 (previously zero growth). The logic behind Goldman Sachs' EPS upgrade is mainly attributed to strong first-quarter earnings reports and the potential for a significant improvement in the European economic outlook driven by stimulative monetary and fiscal policies, believing that Germany's fiscal stimulus and the continued decline in European Central Bank interest rates will further become a tailwind for the European market