PayPal kicks off fintech earnings as investors fear impact of Trump tariffs on consumer spending

In an illustration dated July 14, 2021, a laptop has a PayPal logo displayed on a smartphone.

Investors are anxious about the upcoming earnings reports of PayPal, Block, and Affirm as these companies are closely linked to consumer health. The uncertainties in the market are mainly due to concerns about President Donald Trump’s tariffs and the potential impact on import costs, unemployment, and consumer spending.

Changes in trade policies, particularly the end of trade exemptions for Chinese imports starting on May 2, are affecting e-commerce companies like Temu and Shein. Wells Fargo analysts highlighted that PayPal is particularly vulnerable to tariff-related volatility, with 90% of its revenue coming from consumer transactions.

PayPal will be the first to report earnings, followed by Block and then Affirm. Despite a challenging year for tech stocks, there was a slight rebound recently as hopes grew for progress in trade agreements under the Trump administration.

The recent executive order signed by Trump imposed tariffs on numerous countries, causing market fluctuations. Companies are struggling to forecast accurately due to uncertainty, and the e-commerce sector faces challenges, especially with higher tariffs impacting sales and revenue.

PayPal, Block, and Affirm are expected to face different pressures in their earnings reports, with analysts closely monitoring their performance. Despite uncertainties, companies are trying to navigate through the challenges posed by changing trade policies and economic conditions.