Jim Cramer warned on Tuesday that President Donald Trump‘s tariffs are beginning to impact consumer spending after three major companies reported disappointing quarterly results.
What Happened: “Long story short: today was a wake-up call,” CNBC’s Cramer said. “The tariffs, even reduced tariffs, are starting to roil things. The consumer’s not spending as much as I thought. There is an acknowledged slowdown there.”
United Parcel Service Inc. (NYSE:UPS), Whirlpool Corp. (NYSE:WHR) and Stanley Black & Decker Inc. (NYSE:SWK) all delivered what Cramer called “jarring quarters” that demonstrate trade policy disruptions affecting the broader economy.
UPS, widely viewed as an economic bellwether, reported declining revenue and warned of ongoing macroeconomic uncertainty. Management cited “U.S. consumer sentiment that was at historic lows” during the conference call, while noting soft manufacturing activity domestically.
Whirlpool missed analyst estimates and provided below-consensus full-year earnings guidance, despite management expectations that new duties will eventually benefit domestic manufacturers. Stanley Black & Decker reported tariff-related supply chain disruptions and projected an $800 million tariff-related hit this year.
Why It Matters: Cramer suggested these results indicate economic softness beyond isolated incidents, particularly after PayPal Holdings Inc. (NASDAQ:PYPL) reported slower transaction growth tied to reduced retail spending in tariff-impacted areas.
“These companies are experiencing the true worries we had about the tariffs while they were being slapped on earlier this year,” Cramer said. The host indicated the Federal Reserve might need to consider rate cuts given the emerging economic headwinds.
The earnings disappointments contrast with Cramer’s previous praise for Trump’s recent trade deals with Japan and the European Union, which he called “clean victories” despite Wall Street’s muted response to the agreements.
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