Companies reporting earnings are doing just fine, despite tariffs

Core Insights - Large American companies are projected to report the highest profits in over 15 years, with an average net profit margin of 13.2% for the S&P 500 as of January 30 [1][2] Financial Performance - If the net profit margin remains at 13.2% for the quarter, it will be the highest recorded since 2009, when FactSet began tracking this metric [2] - Among the 11 S&P 500 sectors, three sectors are reporting an increase in net profit margins for Q4 2025 compared to Q4 2024, while eight sectors are experiencing a decrease [3] Future Projections - Analysts expect net profit margins for the S&P 500 to increase further in 2026, with estimated margins of 13.2%, 13.8%, 14.2%, and 14.2% for Q1 to Q4 respectively [4] - U.S. stocks are anticipated to end 2026 higher, with Deutsche Bank forecasting an 18% increase for the S&P 500 and LPL Financial predicting an 8% increase [4] Influencing Factors - Corporate earnings are being supported by advancements in artificial intelligence technology and tax cuts enacted in 2025, despite challenges from higher tariffs [5]