What’s going on here?

Microsoft and Facebook-parent Meta revealed better-than-expected results on Wednesday despite tariffs threatening the tech industry’s prospects, so investors had little choice but to float the stocks a little higher.

What does this mean?

Big Tech is up against it: tariffs are rising while investors’ expectations are still ceiling-height. But Microsoft and Meta held their own under pressure. Microsoft’s revenue was 13% higher than the same time last year, with its cloud division bringing sales up by a third. The firm’s other two core divisions – productivity and personal computing – beat forecasts, too. Investors initially sent the shares up 6%, bringing them back to their New Year’s price.

Meta, meanwhile, reported sales that were 16% beefier than this time last year. The advertising business held up well – with the average ad price up by 10% – despite many fearing that clients would pull back in the face of tariffs. Investors approved, sending the stock 5% higher.

But the pair didn’t save their cash. Microsoft spent 53% more last quarter than the year before – while Meta expects to splash $7 billion more this year than previously expected, meaning a total of $72 billion.

Why should I care?

Zooming out: What happens abroad doesn’t stay abroad.

Tariffs aren’t Big Tech’s only worry: regulatory crackdowns in Europe and rising tensions with China could soon weigh on revenue, too. Case in point: Meta’s apps are banned in China, but the Chinese companies still turn up on feeds outside of the country. In fact, Chinese firms like Shein and Temu made up over 11% of Meta’s revenue last year by advertising to US shoppers. But with new tariffs making international shipping prohibitively pricey, that $7 billion cash flow could dry up fast. And as Europe becomes increasingly strict on targeted ads, Meta’s ad business could be dealt another blow as soon as this quarter. So sure, the last quarter’s takings might seem reassuring – but it’s the next few reveals that could act as a real stress test.

What’s going on here?

Major US and European companies invoked the takesie-backsies rule on their annual forecasts, wary of giving investors the wrong idea.

What does this mean?

Tariffs aren’t just making imports more expensive: they’re holding up entire supply chains as producers sit tight or change shipping routes. That’s making it practically impossible for companies to predict their costs, plan for deliveries, and forecast demand from cost-conscious consumers. So now, both American and European companies – including hefty ones like General Motors, JetBlue, Volvo, Snap, and UPS – are taking back their outlooks for the year.

Why should I care?

For markets: Who turned the lights off?

Wall Street analysts use companies’ forecasts to predict their future share prices. Without them, they have to guesstimate even more. That means stocks may be more volatile, with analysts adjusting rougher expectations as more data comes out. That could be especially risky for companies heavily reliant on global trade, like carmakers, airlines, and shipping firms. UPS has already decided to lay off 20,000 workers and JetBlue has started reviewing how many planes it needs in the air. That indicates serious concern about the months ahead – and if earnings for the next few quarters are worse than expected, analysts will likely downgrade stocks over and over.

Zooming out: America’s down bad.

The US’s trade deficit (the gap between how much it imports and exports) hit a record high in March. That’s partly because stateside businesses rushed to ship in stock before tariffs kicked in. And as international imports push economic growth down, so JPMorgan and Goldman Sachs say the US economy shrunk last quarter. And it might keep getting smaller: retailers including Walmart and Amazon have paused shipments – that likely means higher prices for the few goods they can sell, which could keep cash-strapped Americans away from the registers.