These analysts say "tariffs are fading in importance" for many U.S. companies

Investing.com - Corporate America may be becoming gradually less concerned about a range of topics that have clouded the outlook for equities and the broader economy over much of 2025, according to analysts at BCA Research.

In a note, the analysts including Irene Tunkel and Rishabh Shah found that commentary in S&P 500-listed firms’ post-earnings calls with analysts "revealed that many of the worries that dominated" these discussions earlier this year "have been fading."

Citing FactSet data and internal analysis, the BCA strategists flagged that tariffs, in particular, are no longer driving such conversations, with mentions falling from 90% of calls in the first quarter to 45% in the third quarter.

Although levies continue to "feature prominently in earnings calls" and have been a drag on some sectors, their impact has so far been mitigated, with profit margin erosion and inflationary pressures limited, the analysts said.

Meanwhile, inflation came up in just under 40% of the calls, down marginally from the second quarter. Recession, once brought up by a little under 30% of executives in the first quarter, is also "now hardly mentioned at all," the BCA analysts said.

Broader economic uncertainty remained a closely-watched topic, however, due largely to the record-long federal government shutdown. Industrial, technology, and financial businesses account for most of these citations.

The figures, which are based on data as of November 13, come as the latest quarterly earnings season draws to a close.

While corporate sentiment has "improved" overall, the third-quarter earnings season was notable for a "wave of layoff announcements" across a wide variety of industries, the analysts noted, arguing that this trend has led to renewed fears around a weakening labor market.

Data from consulting firm Challenger, Gray & Christmas showed that U.S. companies’ job-cut announcements almost tripled in October versus the prior month. So far this year, American employers have unveiled nearly 1.1 million job cuts, rising 65% from the first 10 months of 2024 -- and the highest such total since the depths of the COVID-19 pandemic in 2020.

"A further deterioration in employment could challenge earnings resilience and sentiment," the analysts wrote.

They added that, while they are "vigilant," their strategic outlook for equities has stayed "constructive for now."