1405 ET - Uncertainty surrounding tariffs likely pulled demand forward, contributing to 1Q earnings trends that have look durable and healthier than expected, Morgan Stanley analysts say in a research note. This pull forward, however, "also raises the risk of an 'air pocket' in 2Q/3Q that leads to an inventory-driven correction," the analysts warn. Looking forward, the analysts say that managing tariff risk is likely to be an ongoing process for companies during President Trump's second term, as the levies are used as negotiating tools. To combat tariffs, companies have relied on pricing, negotiating with suppliers, redirecting and diversifying supply chains, and stockpiling, the analysts say. (connor.hart@wsj.com)

(END) Dow Jones Newswires

May 13, 2025 14:06 ET (18:06 GMT)

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