IBM, Procter & Gamble, Nokia Stocks Plunge Amid Earnings Disappointments

In the late hours of the night, several prominent U.S. stocks experienced significant sell-offs due to disappointing earnings reports. IBM's stock plummeted by more than 8% as the company's latest financial report failed to alleviate investor concerns about the impact of tariffs and potential cuts in federal government spending on its business. Procter & Gamble also saw a sharp decline, with its stock dropping by more than 5% amid similar concerns.

IBM's financial report for the first quarter showed revenue of $14.5 billion, a 1% increase year-over-year, which exceeded market expectations. However, the adjusted earnings per share of $1.60, while higher than analyst estimates, did not address investor worries about the potential impact of tariffs and government spending cuts on the company's operations. Procter & Gamble's third-quarter sales for the fiscal year 2025 were $19.8 billion, a 2% decrease year-over-year, falling short of market expectations. The company also lowered its full-year sales and profit forecasts due to the uncertain tariff policies, projecting organic sales growth of around 2% for the year, down from the previous estimate of 3% to 5%.

Nokia's stock also took a hit, falling by more than 10% as the company's first-quarter net sales of €4.39 billion missed analyst expectations of €4.41 billion. The company's adjusted operating profit of €156 million was significantly lower than the market forecast of €2.796 billion, and the adjusted earnings per share of €0.03 fell short of the expected €0.04. Nokia attributed the decline to the impact of U.S. tariffs, which are expected to affect second-quarter profits by €20 million to €30 million. The company also revised its full-year adjusted operating profit forecast to between €1.9 billion and €2.4 billion.

Despite the disappointing earnings reports, the overall U.S. stock market remained resilient, with the three major indices opening higher. The Nasdaq and S&P 500 indices both rose by more than 1%, driven by strength in large-cap technology stocks. Analysts attributed the market's positive performance to signals from the Trump administration indicating a potential easing of tariffs. However, the market's reaction to the earnings reports highlights the ongoing concerns about the impact of trade tensions on corporate earnings and investor sentiment.

In addition to the earnings reports, recent comments from Federal Reserve officials have also garnered market attention. Federal Reserve Governor Christopher Waller warned that if the labor market experiences a significant downturn, the Fed may need to cut interest rates more frequently and rapidly. Beth Hammack, President of the Federal Reserve Bank of Cleveland, suggested that the Fed could take action as early as June if there is clear evidence of the economic direction. These comments underscore the Fed's commitment to supporting the economy in the face of ongoing uncertainties, including the potential impact of tariffs on corporate earnings and investor sentiment.