LIVE MARKETS-Corporate America braces for tariffs, job cuts as sentiment turns negative

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CORPORATE AMERICA BRACES FOR TARIFFS, JOB CUTS AS SENTIMENT TURNS NEGATIVE

Corporate America is bracing for impact as recession fears resurface amid tariff uncertainties, with economic sentiment among businesses and consumers turning sharply negative, a new report from S&P Global Market Intelligence shows.

Mentions of "tariff" in second-quarter earnings transcripts jumped to 6,541, a steep rise from 335 just six months earlier, underscoring growing unease among corporate leaders, the report said.

Mentions of the 'R' word (recession) in earnings discussions jumped tenfold to 355 on a quarterly-over-quarter basis.

The report, based on 451 Research's macroeconomic surveys, shows that business sentiment plunged from +19 six months ago to -22 in June, while consumer sentiment dropped from +2 in January to -11 by July.

Hiring plans are being scaled back as companies brace for higher costs and economic uncertainty. About 13% of surveyed participants said their organizations plan to reduce full-time staff over the next 12 months, up from 10% at the end of 2024. Among large enterprises, that figure climbs to 23%, compared to just 8% among small and mid-sized firms.

Meanwhile, job security fears are mounting among American workers. Roughly 42% of the 1,644 consumers surveyed expressed strong concern about job loss within their household. Those in software, IT, and computer services reported the highest levels of anxiety.

The monthly jobs report in August showed weaker-than-expected employment growth in July, while numbers for the prior two months were revised down, suggesting a sharp deterioration in labor market conditions.

As companies weigh cost-cutting measures and automation, both hiring intent and employee retention priorities are slipping. Analysts say this shift could signal a broader slowdown, especially if tariffs are fully implemented in the coming months.

(Medha Singh and Purvi Agarwal)

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