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Investing.com -- Tariff pressures are beginning to weigh on expectations for consumer and cyclical industries, with earnings revisions for the second half of 2025 (2H25) reflecting growing headwinds, according to Barclays (LON:BARC).
The bank compared year-to-date (YTD) revisions to 2H25 earnings at the industry level against a 10-year history to identify sectors where estimates look stronger or weaker than in a typical year.
It found that data center and AI-related industries, such as Electronics and Electrical Equipment, are seeing better-than-average revisions.
Financials, particularly Financial Services, Banks and Capital Markets, are also benefiting from positive momentum, reinforcing Barclays’ “Positive” sector view.
On the other hand, several consumer and cyclical industries are showing notable weakness.
“Managed Care is weathering exceptionally negative revisions to 2H25 (in contrast to its healthier sector peer Pharma), as are Consumer Durables, Chemicals and Food — the latter of which are all grouped within sectors that we view as relatively exposed to tariffs,” strategists led by Venu Krishna said.
The team noted that the tariff effect appears to be filtering into company-level earnings adjustments, even though broader macroeconomic indicators have not yet reflected the impact.
“Tariff headwinds (and their inflation impulse) could be working their way into estimates for select consumer and cyclical industries, despite little read-through to macro data YTD.”
This week, the U.S. Commerce Department announced new tariffs on more than 400 steel- and aluminum-related products, including wind turbines, heavy machinery, appliances, railcars, motorcycles, marine engines, furniture, and packaging materials.
The measures impose a 50% duty on the steel and aluminum content plus country-specific rates on other components.
The tariffs took effect immediately and also apply to compressors, pumps, and metals used in cosmetics and personal care packaging.