Strong Dollar Threatens Big Tech Earnings Outlook

The recent surge in the U.S. dollar, which has risen nearly 7% since September, is raising concerns for major multinational companies like Apple and Amazon as it threatens their earnings outlook. Analysts warn that a stronger dollar, which reduces export demand and lowers the value of overseas gains, could significantly impact the profitability of S&P 500 tech and AI stocks. Goldman Sachs reported that nearly 40% of S&P 500 earnings calls mentioned foreign exchange (FX) impacts, with companies bracing for continued economic pressures. Amazon recently cited currency-related challenges in its earnings forecasts, while Apple is also preparing for potential headwinds. Historical trends suggest that a strong dollar has previously led to earnings recessions for S&P 500 companies, prompting fears that history may repeat itself. As the dollar's strength is expected to persist into 2025, investors are left questioning the sustainability of the current stock rally.