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Profits Popped

Corporate America roared back in Q4, with profits climbing 4.1%—the strongest quarterly gain since 2022. Nonfinancial firms saw a 4.2% jump, while financial companies surged 6.6%, boosted by rising rates and margin expansion. The Commerce Department also revised GDP growth up to 3.4%, driven by stronger-than-expected business investment and consumer resilience.

But it’s worth remembering: these results are backward-looking. They reflect pre-tariff momentum, captured before the latest wave of trade tension and economic uncertainty began to take hold. The profit rebound shows that companies were thriving ahead of renewed headwinds, with enough strength to invest, hire, and return capital to shareholders. The question now is whether that resilience will hold as tariffs hit supply chains and inflation stays sticky. For now, the message is clear: earnings are up—but storm clouds are forming.