By Sabrina Escobar

Federal Reserve Chair Jerome Powell said this week there was "no question" consumer spending had cooled in recent months. But if Americans are pulling back on purchases, the country's tech giants haven't felt it yet.

The coming months could determine whether Big Tech can defy an economic slowdown -- or fall victim to the same ailments afflicting traditional retailers.

Amazon's net sales in North America rose 11% to $100 billion in the quarter, and are up a solid 9% for the first half of the fiscal year.

"We just haven't seen diminished demand," said Amazon.com CEO Andrew Jassy.

Apple notched record revenue in more than two dozen countries and regions, including the U.S., which saw sales rise 9% year over year. iPhone sales, which had been weak in past quarters, rose 13% globally, reflecting an encouraging renaissance in one of Apple's key revenue drivers.

Other, smaller tech companies also showed no sign of faltering consumers.

eBay had a strong quarter, with U.S. gross merchandise value growth accelerating to 7% in the quarter from nearly 0.5% the prior quarter. The results were driven by stronger-than-expected consumer demand and increases in average selling prices, executives said.

"When you look at the macro environment, US in Q2 was more favorable than we expected despite the tariff announcements and the elimination of the de minimis for imported goods," said eBay CEO Jamie Iannone.

Etsy's Chief Financial Officer Lanny Baker noted the company hadn't seen any big shifts in spending tied to tariffs or trade announcements.

"The general read is the consumer that we're seeing looks a little bit better -- slightly better than it was perhaps three months ago with higher income households a little bit healthier within that," Baker said.

Still the upbeat assessments from tech companies seemed to clash with the market's dour mood at the end of a data-heavy week.

The takeaway from several economic releases is that inflation is moving higher while hiring is slowing. The new tariffs announced by President Donald Trump on Thursday -- which range from a baseline 10% rate to as much as 40% or 50% for select countries -- could push prices up further.

The lingering question is low long consumers will remain resilient.

Until this year, a strong labor market and wage gains supported American spending. Given the unemployment rate remains low at 4.2% and wage growth has remained stable, these tailwinds could continue to undergird spending in the near future.

Indeed, Etsy's Baker said that while the macroeconomic environment remains uncertain, the business had performed well in July, "reflecting sustained healthy consumer trends in the US."

But the consumer outlook beyond that is cloudy, and in a way contingent on how companies respond to the new tariffs. If they start hiking prices once their current inventories sell off, shoppers may cut back even more.

"It's hard to know what will happen when we deplete some of the prebuys that we did on our own first-party retail and then some of the forward deploying that we saw of our third-party selling partners," Amazon's Jassy said. "And when -- if costs go up over time -- we're unsure at this point who's going to end up absorbing those higher costs."

Of course, even in the toughest economic times, there are winners and losers. Some e-commerce companies are poised to emerge victorious, likely giving them additional confidence.

Amazon's low prices have helped the company gain market share among budget-conscious consumers. Meanwhile, if tariffs push up the cost to import new products, the demand for secondhand goods could increase, benefiting secondhand sellers such as eBay.

The true test still lies ahead, however. Big-box retailers have yet to report their second-quarter results, which could give investors further insight on whether Big Tech's bullish outlook is a fluke, or if it is an accurate reflection of the broader consumer environment.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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August 01, 2025 14:51 ET (18:51 GMT)

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