Gloomy earnings show consumers are feeling the pinch of US tariffs

Lackluster quarterly results from consumer-facing companies including McDonald's and Harley-Davidson are the latest sign that American shoppers are curbing spending amid shifting US trade policies.

- 

McDonald's posted a surprise decline in quarterly global sales on Thursday and said it was navigating the “toughest of market conditions”. It echoed recent warnings from restaurant operators Domino's Pizza, Chipotle Mexican Grill and Starbucks that Americans were spending less on dining out.

Cosmetics maker Estee Lauder forecast a bigger-than-expected drop in fiscal 2025 sales, while motorbike maker Harley-Davidson joined a spate of companies this week in pulling forecasts, citing the uncertain macroeconomic environment.

Investors have been worried that the Trump administration's tariff plans will spur a resurgence in inflation and hurt global economic growth, in turn deterring discretionary spending.

"It's very difficult for retailers to give solid guidance and not be conservative when they don't know what they're going to be able to get in terms of inventories, especially ones that come from China," said Art Hogan, chief market strategist at B Riley Wealth.

Estee Lauder said sales in the Americas declined primarily due to a dip in “consumer confidence and sentiment”, which led to elevated inventory levels and destocking at certain retailers.