JPMorgan Chase CEO Jamie Dimon has expressed concerns that corporate earnings estimates will decline due to the uncertainty created by President Donald Trump’s trade negotiations. During a call with reporters to discuss first-quarter earnings, Dimon noted that several companies have already withdrawn their guidance, and he expects more to follow suit. He cited that analysts have generally reduced their S&P 500 earnings estimates by 5%, and he anticipates further reductions. Specifically, Dimon predicted that analysts would slash their S&P 500 earnings estimates for growth of 5% to become flat and then as much as negative 5% within the next month.

Market and Corporate Responses

The uncertainty surrounding trade policies has led to significant market volatility. Since Trump announced a broad set of tariffs on America’s trading partners, markets have swung wildly, and the situation has only worsened as U.S.-China tensions escalate. Companies with exposure to consumer markets, such as Walmart, Delta, and Frontier Airlines, have already scaled back parts of their guidance to investors. This uncertainty has caused clients to hold off on acquiring companies and making investments, adopting a wait-and-see attitude. Dimon and JPMorgan CFO Jeremy Barnum noted that this cautious approach extends beyond large deals, with middle-market companies also being very cautious about investment.

Corporate Strategy Shifts

Barnum highlighted that the current environment has led businesses to drop long-term plans in favor of optimizing their supply chains in the near term. This shift reflects the difficulty of planning for the long term amid such high levels of policy uncertainty. Meanwhile, consumers have shown resilience in the first quarter, and there are indications that they have accelerated purchases out of concern that tariffs will make items more expensive.

Dimon’s remarks underscore the significant impact that trade policy uncertainty can have on corporate earnings and market confidence. As companies prepare to report earnings over the next several weeks, investors will be closely monitoring how managers update their outlooks in this period of heightened uncertainty. The potential for further reductions in earnings estimates and the shift towards short-term optimization highlight the challenges businesses face in navigating the current economic landscape.