Corporate America is no longer sounding the alarm on recession. Despite a historic spike in tariffs, talk of an economic downturn has largely disappeared from boardrooms — and earnings reports are reinforcing the optimism.
According to data from FactSet, only 16 companies in the S&P 500 mentioned the word “recession” during their second-quarter earnings calls, a steep decline from 124 in the first quarter and far below the 10-year average of 61. It’s the lowest figure since Q4 2021, signaling a notable shift in sentiment.
“Recession was uttered just 16 times this quarter (4%),” said Neil Sethi, managing partner at Sethi Associates, citing FactSet. “That’s down from 124 in Q1 and the least since late 2021.”
Tariffs Hit Century Highs — But Worry Doesn’t Follow
The drop in recession concerns comes at an unlikely time: U.S. tariffs are now at their highest sustained level since the 1910s.
President Donald Trump recently expanded a sweeping tariff package, building on measures announced in April, aimed at reviving domestic manufacturing. The result: the average U.S. tariff rate has surged to 20.1%, according to estimates from the World Trade Organization and the International Monetary Fund.
Still, many corporate leaders seem to be betting that the tariffs will eventually be eased through negotiations, rather than becoming a long-term economic drag.
Markets Stay Resilient, Crypto Joins the Rally
Equity markets have largely shrugged off the trade policy shift. Since the early-April dip, the S&P 500 has gained 28%, reflecting renewed investor confidence. Bitcoin, too, has posted massive gains — soaring 62%, from about $75,000 to $122,000, according to CoinDesk.
JPMorgan analysts suggest that markets are more focused on resilient corporate earnings and improving economic data than on tariff-induced risks.
Earnings Season Surpasses Expectations
More than 80% of S&P 500 companies have now reported Q2 results. Of those, over 80% beat earnings estimates, and 79% topped revenue forecasts — marking the strongest quarterly performance in four years.
Taken together, the collapse in recession commentary, the strength of earnings, and the rally across risk assets paint a clear picture: businesses and markets alike are looking forward, not back.
