Corporate Earnings Reveal Resilience in Tech Amid Global Tariff Turmoil

Economic

Summary:

Despite escalating trade tensions and widespread tariff disruptions, tech giants such as Alphabet, SK Hynix, Infosys, and global consumer brands like Nestlé and Roche delivered stronger-than-expected earnings...

Tech leaders defy trade headwinds with strong results and forward guidance

Some of the world’s top technology firms have emerged as clear outperformers amid the ongoing uncertainty surrounding US trade policy. Alphabet, SK Hynix, and Infosys all posted earnings that beat market expectations and issued forward guidance signaling confidence in future performance.

SK Hynix, a critical supplier to Nvidia, reported record quarterly profit fueled by strong demand for AI chips and a strategic buildup of inventories by customers anticipating additional US tariffs. Meanwhile, Infosys, a key Indian IT services firm, raised the lower bound of its revenue growth forecast to 1%–3%, reflecting steady business demand despite regulatory and currency uncertainties.

Alphabet also stood out, not only with better-than-expected earnings but by signaling increased investment plans, reinforcing long-term bullish sentiment in cloud infrastructure and AI development. These companies' proactive stance boosting capital expenditures and preparing for supply chain volatility suggests a degree of resilience rooted in innovation and forward-looking capacity management.

Global tariff pressure weighs heavily on industrial sectors

While tech firms shine, the broader Q2 earnings season has revealed significant pain among traditional manufacturers, particularly in automotive, aerospace, and pharmaceutical industries. Between July 16 and 22, companies collectively reported up to $7.8 billion in full-year losses, with US tariffs cited as a primary driver.

Hyundai reported a 16% drop in Q2 operating profit, attributing 828 billion won (approximately $606.5 million) in losses to tariffs. General Motors echoed this narrative, with tariffs cutting $1.1 billion from its earnings. Tesla also highlighted pressure, with CEO Elon Musk warning of “rough quarters ahead” due to reduced government support for electric vehicles, following its worst sales performance in over a decade.

These cases underscore the asymmetric impact of trade policy. Industries with high fixed costs, complex supply chains, and export exposure like automaking and aerospace are struggling to absorb the price distortion caused by sudden tariff changes.

Consumer brands show resilience through strategic inventory and demand

Swiss pharmaceutical giant Roche and global food and beverage leader Nestlé offered more positive signals. Roche beat H1 profit expectations and confirmed it had increased inventories in the US to hedge against the threat of incoming tariffs, a strategy that may reduce initial disruption. CEO Thomas Schinecker emphasized ongoing investment in local US production facilities, possibly to strengthen their case for exemption or leniency.

Nestlé posted solid organic sales growth and maintained its 2025 outlook, a sign that consumer staples may be better positioned to weather the volatility. These firms have pricing power, diversified supply chains, and more flexible cost structures, enabling them to pass on some cost increases without significantly disrupting margins.

High-stakes diplomacy ahead of August deadline

The underlying cause of this market bifurcation global trade tension remains unresolved. The recent US-Japan trade agreement, which includes reduced tariffs on auto imports, briefly boosted market sentiment and raised hopes for similar deals with the European Union, South Korea, Brazil, and Canada before the revised August 1 deadline.

However, uncertainty persists. South Korea’s finance ministry announced that its scheduled trade talks with US Treasury Secretary Scott Bessent were postponed, raising doubts over its ability to secure exemptions for key industries. Meanwhile, the EU is considering a 15% baseline tariff with conditional exemptions, and is entering a summit with China while bracing for pressure from both Beijing and Washington.

The overlapping negotiations, shifting deadlines, and lack of coherent global coordination all add complexity to corporate forecasting and capital allocation, making long-term planning increasingly difficult for multinationals.

Sectoral divergence widens as trade deadline nears

Q2 2025 earnings illustrate a clear divergence between technology and industrial sectors. While innovative, asset-light firms such as Alphabet and SK Hynix continue to expand in spite of trade friction, capital-intensive manufacturers like Hyundai and GM are absorbing immediate and significant losses.

Consumer staples and healthcare companies, aided by inventory hedging and diversified footprints, provide a degree of defensive stability. With major economies still rushing to conclude trade agreements before the looming August 1 deadline, the landscape remains fluid. For now, only the most adaptable companies those with foresight, capital strength, and geopolitical agility are positioned to thrive in this era of unpredictable policy and persistent macroeconomic tension.

Source: Reuters

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Gerik

Economic

Automakers face mounting structural headwinds

The European auto market recorded a sharp decline in new vehicle registrations in June, down 5.1% year-on-year across the EU, UK, and EFTA regions, according to data from the European Automobile Manufacturers Association (ACEA). This downturn signals the growing burden faced by traditional automakers navigating a challenging landscape of elevated tariffs, regulatory pressure, and global competition.

Volkswagen Group’s sales dropped 6.1%, while Renault and Hyundai saw even steeper declines of 12.3% and 8.7%, respectively. Stellantis reported a marginal dip of 0.6%. Tesla, meanwhile, recorded a 22.9% drop in deliveries, its sixth straight month of shrinking market share in Europe. The company’s share of the regional market contracted to 2.8%, from 3.4% a year earlier.

This widespread contraction highlights a convergence of challenges affecting legacy and disruptive players alike. Most notably, the 25% US tariff on European vehicle imports announced earlier this year has eroded margins and demand for key export segments, particularly among German manufacturers. Simultaneously, rising competition from Chinese automakers like BYD has intensified pricing pressures, especially in the battery electric vehicle (BEV) segment.

Electric vehicle adoption grows, but incumbents lag

While overall auto sales in the EU fell 7.3% in June, electrified vehicle registrations surged. Battery electric vehicles rose 7.8%, hybrids jumped 41.6%, and plug-in hybrids increased 6.1%. Together, these vehicle types accounted for nearly 60% of EU passenger car sales up sharply from 50% a year ago.

Despite this growth, traditional automakers appear slow to capture demand in this segment. Newer brands and Chinese entrants are aggressively expanding in the EV market, undercutting incumbents on both price and product offerings. According to Ben Nelmes of New AutoMotive, established carmakers have failed to respond quickly enough to consumer demand for cleaner, affordable vehicles, creating an opening for challengers.

Notably, brands not included in ACEA data such as BYD and other Chinese manufacturers doubled their combined market share to 4.5%, reflecting growing traction among European consumers seeking lower-cost EV alternatives.

Regional performance diverges amid economic pressures

National-level sales trends revealed uneven performance across Europe. Germany, France, and Italy saw significant declines of 13.8%, 6.7%, and 17.4%, respectively. In contrast, Britain recorded a 6.7% rise in sales, and Spain posted an impressive 15.2% increase.

These divergent outcomes are partly a function of domestic policy differences, including varying EV subsidies, consumer confidence levels, and industrial exposure to export markets. Germany’s sharp decline is particularly notable given its heavy reliance on automotive exports and vulnerability to US and Chinese trade actions.

Industry disruption accelerates as incumbents struggle to adapt

The June car sales slump across Europe underscores the growing mismatch between legacy automakers’ strategies and the rapidly evolving preferences of consumers. While EV adoption is clearly rising, incumbents are failing to lead this transition, losing share to faster, more agile entrants. At the same time, geopolitical frictions, especially the US tariff regime, are further distorting demand and squeezing profitability.

Unless Europe’s major automakers accelerate innovation and adapt more decisively to structural shifts in global trade and vehicle technology, they risk ceding more ground to foreign competition both on the continent and abroad. The next six months, shaped by trade negotiations and EV market dynamics, will be critical in determining whether they can regain momentum or continue to lag behind.

Source: Reuters

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Glendon

Economic

Forex

Britain’s private sector lost momentum in July as the fallout from the Labour government’s first budget and a febrile global backdrop prompted firms to cut jobs and new orders, according to a closely watched survey.

S&P Global’s purchasing managers’ index slipped to 51 in July from the nine-month high of 52 the previous month. It was slightly worse than the 51.8 reading expected by economists surveyed by Bloomberg.

While the index held above the 50 threshold separating growth and contraction, S&P said July’s survey implied a tepid quarterly growth rate of just 0.1%.

It showed the UK economy struggling to shake off the twin hits of Labour’s tax-raising budget and a volatile geopolitical environment caused by Donald Trump’s US tariffs. The survey chimed with recent official data suggesting the economy slowed sharply from the bumper 0.7% growth seen in the first quarter.

“The sluggish output growth reported in July reflected headwinds of deteriorating order books, subdued business confidence and rising costs,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. He said these were “widely linked to the ongoing impact of the policy changes announced in last autumn’s budget and the broader destabilising effect of geopolitical uncertainty.”

The manufacturing output index improved to a still-stagnant score of 50, suggesting an eight-month contraction in production ended. However, the UK’s powerhouse services sector suffered a slowdown to reading of 51.2, down from 52.8.

Firms cut employment at the fastest pace in five months after being hit in April by a £26 billion ($35 billion) increase in payroll taxes and a hike in the minimum wage. S&P said this was being done through a mixture of hiring freezes and redundancies.

New orders declined after picking up in June, while export sales fell for a ninth straight month as firms delay shipments and investment decisions amid the White House’s volatile tariff announcements. Input price inflation rose, fueled by April’s jump in employment costs.

Source: Bloomberg Europe

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Damon

Economic

Forex

Brent forecast: key trading points

●Brent moves into positive territory, but the consolidation range remains intact

●New US-China trade talks could provide the market with a new catalyst

●Brent forecast for 24 July 2025: 68.60

Fundamental analysis

On Thursday, Brent prices rose to 68.21 USD per barrel, ending a four-day decline. The market found support from progress in trade negotiations.The US and EU are aligning their positions on a new deal that may impose 15% tariffs on most European goods, following the model of the deal already struck with Japan. This boosted optimism among market participants and eased concerns that prolonged trade disputes could harm global oil demand.

Further support came from US Department of Energy data: crude oil inventories fell by 3.2 million barrels last week – more than expected. Gasoline stocks dropped by 1.7 million barrels, while distillates rose by 2.9 million.Traders are also watching the upcoming meeting between US Treasury Secretary Scott Bessent and Chinese officials in Stockholm. The discussions will focus on extending the trade truce and may also address Chinese purchases of sanctioned oil from Russia and Iran.The Brent forecast is favourable.

Brent technical analysis

The H4 chart shows Brent trading within a sideways range with moderate volatility. After an unsuccessful attempt to break above the 70.03 resistance level between 11 and 16 July, prices pulled back and consolidated below 68.58.

The quotes currently stand near 68.21, around the middle Bollinger Band. The lower boundary of the support channel is at 67.20, which twice held back declines (on 18 and 23 July). The upper resistance boundary lies at 68.58. While prices remain between these levels, the market stays in a consolidation mode.

Technically, the movement potential remains limited: a breakout above 68.60 may open the way to 70.00, while a breakdown below 67.20 could deepen the correction. The direction will largely depend on news regarding demand and US trade negotiations with key partners.

Summary

Brent crude remains in consolidation despite the current rise. The Brent forecast for today, 24 July 2025, suggests a potential attempt to break above 68.60.

Source: RoboForex

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Winkelmann

Economic

Stocks

Amazon has been one of the best investments money can buy over its nearly three decades on the stock market. It's up more than 233,000% since its first-day closing price, and if you'd invested $1,000 then, you'd have more than $2.33 million today.

But the growth story isn't finished. There are many reasons to believe Amazon stock can soar some more. Here's the biggest reason why.

Image source: Amazon

There is a shift to the cloud

One theme CEO Andy Jassy mentions at almost every opportunity is the shift to the cloud. Amazon Web Services (AWS) is Amazon's cloud solutions business, and it's the largest in the world, with 30% of the market, according to Statista. It's one of the company's fastest-growing segments, up 17% in the 2025 first quarter, and it's responsible for most of Amazon's operating income -- 63% in the quarter.

However, according to Jassy, cloud services are still a small percentage of the company's information technology (IT) spend. Jassy says that 85% to 90% of IT spend is still on the premises, but over the next 10 to 20 years, that's going to switch.

If clients were already starting to make the switch before the advent of generative artificial intelligence (AI), they're even more interested now, because the cloud is where there are the greatest opportunities to engage with and benefit from AI. That's a natural growth driver for Amazon, and even more important for the bottom line.

Amazon is investing more than $100 billion in developing its AI business in 2025 alone to offer the most competitive platform and maintain its lead, and it's well-positioned to benefit from the shift to the cloud over the next decade or two. That makes its stock a buy.

Source: The Motley Fool

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Michelle

Economic

Forex

Euro zone business activity accelerated faster than forecast this month, supported by a solid improvement in the bloc's dominant services industry and with manufacturing showing further signs of recovery, a survey showed on Thursday.

HCOB's preliminary composite euro zone Purchasing Managers' Index, compiled by S&P Global and seen as a good guide to growth, rose to an 11-month high of 51.0 points from 50.6 in June.

That was above the 50.0 mark separating growth from contraction and above expectations for 50.8 in a Reuters poll.

"The euro zone economy appears to be gradually regaining momentum. The recession in the manufacturing sector is coming to an end, and growth in the services sector accelerated slightly in July," said Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank.

For the first time in over a year, overall demand did not decline, though there was no expansion. The composite new business index came in bang on 50, its highest level since May 2024.

The services PMI rose to 51.2 from 50.5, exceeding the Reuters poll forecast for a more modest lift to 50.7.

Inflationary pressures eased with the services input and output prices indexes falling. The input prices index fell to a nine-month low of 56.7 from 58.1.

Inflation was at 2.0% in June, official data showed earlier this month, right where the European Central Bank wants it.

The ECB will hold policy steady later on Thursday, according to all 84 economists surveyed in a Reuters poll, while a small majority expect one more interest rate cut - most likely in September.

A manufacturing PMI, which has been sub-50 for three years, climbed to 49.8 from June's 49.5, just ahead of the poll estimate for 49.7, while an index measuring output dipped slightly to 50.7 from 50.8.

Although some of that activity was driven by completing past orders, factories did so at the slowest rate in around three years. The backlogs of work index rose to 49.0 from 47.1.

Source: Yahoo Finance

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Gerik

Economic

Technology firms deliver resilience amid policy volatility

In the midst of widespread uncertainty stemming from shifting US trade policy, a handful of major technology companies have emerged as standouts. Alphabet, SK Hynix, and Infosys all beat market expectations in their Q2 2025 earnings and projected optimistic forward guidance, signaling underlying sector resilience. Alphabet and SK Hynix notably announced plans to increase capital expenditures, reinforcing investor confidence in long-term demand.

SK Hynix, a key supplier to Nvidia, reported record quarterly profits driven by surging demand for AI-related semiconductors and customer stockpiling in anticipation of new US tariffs. Infosys, while facing slower global growth in services, raised the lower bound of its revenue forecast from flat to 1%, now expecting annual growth between 1% and 3%, in line with analyst expectations.

These results reflect not just the strength of the AI and digital infrastructure boom, but also a strategic repositioning by tech firms to navigate tariff disruptions. In the case of SK Hynix, early inventory buildup illustrates a proactive adjustment to anticipated policy shifts, reducing near-term vulnerability.

Wider earnings landscape dimmed by tariff-driven losses

Outside the tech sector, the broader corporate earnings environment has been marked by turbulence. From July 16 to 22, cumulative losses reported across global industries reached up to $7.8 billion. The automotive, aerospace, and pharmaceutical sectors have been among the hardest hit, with significant cost pass-throughs from new tariff regimes.

South Korea’s Hyundai Motor reported a 16% decline in Q2 operating profit, attributing approximately 828 billion won ($606.5 million) in losses to US tariffs on vehicles and parts. In the United States, General Motors reported a $1.1 billion earnings hit from tariffs in the same period. These figures suggest a direct and measurable cost impact that is dragging down margins in sectors reliant on global production networks and just-in-time supply chains.

Tesla, facing weaker domestic support and increased competition, reported its worst quarterly sales decline in over a decade. CEO Elon Musk noted that reduced US government support for EVs could lead to a “few rough quarters,” a statement interpreted as a sign of deteriorating demand in one of the key growth sectors of the past decade.

Trade negotiations spark volatility as deadline looms

The near-term outlook remains heavily tied to the outcome of ongoing trade negotiations. A positive development came with the US-Japan trade agreement announced earlier this week, which rolled back some automotive tariffs and avoided broader levies on Japanese exports. This boosted investor sentiment and lifted global equity markets.

Attention now turns to the European Union, South Korea, Brazil, and Canada nations still in negotiation limbo ahead of the revised August 1 tariff deadline. Reports indicate the EU may agree to a 15% baseline tariff with conditional exemptions, though the exact framework remains under discussion. Talks with South Korea were abruptly postponed due to a scheduling conflict with US Treasury Secretary Scott Bessent, raising doubts about whether a resolution can be reached in time to avoid significant economic consequences.

The EU-China summit and Bessent’s upcoming trip to Sweden for talks with Chinese officials further underscore the multi-front complexity of current trade diplomacy. With the US exerting pressure on multiple trade partners simultaneously, the risk of fragmented outcomes and trade fragmentation remains elevated.

Sectoral divergence grows as tariff deadline nears

While the technology sector has so far demonstrated adaptability and strength in the face of volatile US trade policy, other sectors are clearly absorbing direct losses. The sharp contrast between record profits at SK Hynix and multi-hundred-million-dollar tariff costs at Hyundai and GM illustrates a growing divergence in corporate resilience.

As the August 1 deadline approaches, the final structure of tariff deals will likely determine the trajectory of global equity markets and the sustainability of earnings across sectors. Until then, companies operating across borders must contend with both policy uncertainty and investor scrutiny conditions that favor agile, well-capitalized firms with global supply chain flexibility.