US earnings season: Trump overshadows more strong results
Company results like these would normally give Wall Street a boost, but the US president’s geopolitical ambitions are making investors nervous.
21st January 2026 15:39
by Graeme Evans from interactive investor
US President Donald Trump at the World Economic Forum (WEF) today in Davos, Switzerland. Photo: Chip Somodevilla/Getty Images.
The sell America trade behind Tuesday’s big Wall Street reverse today continued to overshadow optimism over the prospect of another robust US earnings season.
The triple sell-off in US equities, Treasuries and dollar in response to President Donald Trump’s Greenland ambitions has been accompanied by a rise in the Vix volatility index.
- Invest with ii: US Earnings Season | Buying US Shares in UK ISA | Cashback Offers
NVIDIA Corp (NASDAQ:NVDA) and Apple Inc (NASDAQ:AAPL) featured among Tuesday’s big fallers as Wall Street experienced its worst session in three months, with the S&P 500 index down by about 2%.
There was some appetite for a rebound today as the S&P 500 index traded about 0.8% higher at the time of Trump’s address to the World Economic Forum in Davos.
Last April it took far bigger moves in markets before there was a climbdown over Liberation Day tariffs.
Capital Economics said: “At the time, concern about the speed and scale of the sell-off in Treasuries in particular was reportedly a decisive factor in the US administration’s more conciliatory tone. So, what could prompt a big move in Treasuries this time around?
“One possibility would be concern about another ‘sell America’ trade gathering momentum.”
- Investment outlook: expert opinion, analysis and ideas
- The big question for 2026: has AI caused a stock market bubble?
- eyeQ: a cheap safe haven in times of trouble
The focus on a potential trade war between the US and Europe has offset the positive early signs from the Wall Street results season, with resilient economic growth and ongoing artificial intelligence (AI) advances set to lift fourth-quarter earnings by 7% on a year earlier.
That compares with the S&P 500’s 13% improvement in the previous three months, although UBS is more optimistic for the fourth quarter based on a 12% forecast.
Bank of America (BofA) is looking for a rise of 11%, driven by further growth of 26% in the technology sector. The rest of S&P 500 earnings are expected to grow by just 1%.
It pointed out that 73% of last week’s early reporters beat on earnings per share, which is better than the usual week one average of 68% but slightly below last quarter's 76%.
Most banks beat expectations, but the results were not strong enough to support stocks including JPMorgan Chase & Co (NYSE:JPM) and Citigroup Inc (NYSE:C).
The sell-off following a strong run for shares was blamed on Trump's proposed credit card interest rate cap, rather than weakness in the fundamental outlook.
Other early reporters have included Delta Air Lines Inc (NYSE:DAL), which provided more evidence of a K-shaped economy as sectors appear to diverge at vastly different rates.
- How to invest in a K-shaped economy
- Sign up to our free newsletter for investment ideas, latest news and award-winning analysis
- ii view: is Citigroup the US bank to own in 2026?
The airline reported premium revenues growth of 9%, which BofA said took the spread against the main cabin segment to a record 16 percentage points.
The bank also highlighted strong earnings from Taiwan Semiconductor Manufacturing Co Ltd ADR (NYSE:TSM), which it said added fuel back into the AI trade as the company guided up on both revenue and capital expenditure.
Netflix Inc (NASDAQ:NFLX) shares today opened 4% lower despite last night’s results showing forecast-beating earnings and revenues alongside subscriber growth of nearly 8% to more than 325 million.
The sell-off came as Netflix said it expects to increase programme spending by 10% this year, which could hit earnings. Its current-quarter forecast for earnings per share was light of expectations, while a potential deal for Warner Bros. Discovery Inc Ordinary Shares - Class A (NASDAQ:WBD) could add $275 million (£205 million) to costs.
The earnings season picks up pace next week with Meta Platforms Inc Class A (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT) and Tesla Inc (NASDAQ:TSLA) due after the closing bell on Wednesday 28 January before Apple the following evening. Nvidia investors will have to wait until 26 February for the chip giant’s quarterly figures.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.