Good morning. Because the Q2 2025 earnings season begins, CFOs are navigating a panorama formed by new tariffs, shifting shopper demand, and heightened market scrutiny.
The primary quarter benefited from a pull-forward of demand forward of anticipated tariffs. In distinction, the second quarter will check firms’ capacity to handle margin strain, provide chain disruptions, and evolving commerce coverage dangers.
Main U.S. banks are among the many first to report outcomes this week. For all firms reporting, analysts can be “laser-focused” on how President Donald Trump’s import taxes are affecting company income, based on Morningstar. A key theme is the impression of tariffs and commerce coverage uncertainty, with analysts intently waiting for margin pressures, indicators of slowing shopper demand, how firms are making ready for new tariffs, and the way they’re dealing with levies which have already been carried out.
Markets have remained comparatively calm heading into Q2, with main indices just like the S&P 500 and Nasdaq not too long ago reaching new highs. Morningstar notes that Q2 earnings are anticipated to disclose developments amongst corporations in tariff-affected industries. Firms with larger prices and tighter margins could also be pressured to soak up extra tariff bills, whereas these with stronger aggressive benefits could possibly move extra prices onto shoppers.
The momentum that propelled the S&P 500 to just about an 11% achieve in Q2 and greater than 7% year-to-date can be examined this week, based on Saira Malik, chief funding officer at international funding supervisor Nuveen. Malik highlighted in a LinkedIn put up on Monday two key dynamics: the unofficial begin of earnings season with Q2 reviews from the monetary sector, and a sequence of U.S. financial information releases, such because the Client Worth Index (CPI) scheduled for launch this morning.
Malik provides, “Whereas total earnings development is predicted to decelerate from final quarter, estimates have stabilized in latest weeks after falling sharply in early April. Nonetheless, the Q2 earnings bar is comparatively low.”
On the financial entrance, Josh Hirt, senior U.S. economist at Vanguard, expects core CPI to extend 0.25% month-over-month (2.9% year-over-year) and headline CPI to rise 0.29% month-over-month (2.6% year-over-year), reflecting average power following Might’s gentle print. “Whereas tariff-related pressures are starting to indicate in choose items classes within the PCE, the general passthrough into CPI stays restricted for now as corporations maintain off on retail worth hikes,” he mentioned in an emailed assertion.
Relating to CFO sentiment, Deloitte’s Q2 2025 CFO Indicators report launched final week discovered that development expectations declined throughout each key operational metric, with finance chiefs decreasing projections for income, earnings, and capital investments.
Nevertheless, Steve Gallucci, international and U.S. chief of Deloitte’s CFO Program, described the present setting as a recalibration, not a retreat. Finance leaders are doubling down on fundamentals: sharpening give attention to development drivers, managing controllable dangers, and staying energetic in M&A.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Fortune 500 Energy Strikes
Marriott
Leeny Oberg, CFO and EVP of improvement at Marriott Worldwide (No. 171) has determined to retire efficient March 31, 2026, after spending greater than 20 years with the U.S. lodge operator. Oberg, CFO since 2016, can be succeeded by Jen Mason, who joined Marriott in 1992 and at the moment serves as international officer, treasurer and danger administration. Mason can also be a former CFO of the U.S. and Canada on the firm. Shawn Hill was promoted to the function of EVP and chief improvement officer, efficient Jan. 1. Oberg has been in that function since February 2023.
Each Friday morning, the weekly Fortune 500 Energy Strikes column tracks Fortune 500 firm C-suite shifts—see the newest version.
Extra notable strikes
Sarah C. Younger was appointed CFO at Bell Companions, a privately held firm specializing in condominium funding and administration, and can succeed John Tomlinson upon his deliberate retirement efficient Aug. 22. Younger joined the corporate on July 9 and can report back to Lili Dunn, CEO and president of Bell Companions. After his retirement, Tomlinson will stay as an advisor to the corporate by way of the tip of 2025. Younger beforehand served as CFO and senior managing director at Quarterra Group, a subsidiary of homebuilder Lennar, the place she labored for 10 years. Earlier than that, Younger was a part of the finance group at Walton Road Capital.
Massive Deal
Though AI stays a high focus, NACD says it’s clear from survey responses that organizations are in very completely different positions with respect to AI adoption and implementation. Some firms are in the course of the implementation of AI tasks, working to “transfer past pilots to deployments” or specializing in bettering governance of AI, together with figuring out “the place it may be carried out and why, and inside controls round verification of output.”
Going deeper
“Elon Musk spent months slashing federal contracts — Now his AI firm is celebrating a $200M Pentagon contract and new unit to get authorities enterprise” is a brand new Fortune report by Jessica Mathews.
Elon Musk’s xAI, a two-year-old AI firm, mentioned in a weblog put up Monday that it has launched a brand new division, known as “Grok with Authorities,” and signed a contract price as much as $200 million with the Division of Protection, Mathews writes. xAI additionally introduced that it had been added to the Normal Companies Administration schedule, which means that xAI merchandise will now be obtainable for buy throughout each authorities workplace and company. Learn extra right here.
Overheard
“Let’s guarantee the trail to enterprise possession isn’t closed off by Wall Road’s python however stays open to each American keen to raise themselves and their households.”
—Brian Hamilton writes in a brand new Fortune opinion piece. Hamilton based Sageworks, a since-acquired fintech firm that helped enterprise homeowners translate advanced monetary data. He additionally starred in ABC’s Free Enterprise, and based the Brian Hamilton Basis and Inmates to Entrepreneurs.
