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NEW YORK (AP) — Amid a backdrop of ongoing tariff uncertainty, more and more gamers are facing price hikes.

Microsoft raised recommended retailer pricing for its Xbox consoles and controllers around the world this week. Its Xbox Series S, for example, now starts at $379.99 in the U.S. — up $80 from the $299.99 price tag that debuted in 2020. And its more powerful Xbox Series X will be $599.99 going forward, a $100 jump from its previous $499.99 listing.

“We understand that these changes are challenging,” Microsoft wrote in a Thursday Xbox support update and subsequent statement sent to The Associated Press. The tech giant didn’t point to tariffs specifically, but cited wider “market conditions and the rising cost of development.”

Beyond the U.S., Microsoft also laid out Xbox price adjustments for Europe, the U.K. and Australia. The company said all other countries would also receive updates locally.

Some Xbox accessories, including wireless controllers, are impacted too — as well as headsets in the U.S. and Canada. And further down the road, Microsoft said it also expects to make some of its new, first-party games more expensive this holiday season — with a price tag of $79.99.

The price hikes arrive during a turbulent and uncertain time for the gaming industry, largely due to new tariffs implemented by U.S. President Donald Trump — and responding retaliation from targeted countries, notably China. Economists have warned that the steeper levies will result in higher prices on a range of consumer goods relying on a global supply chain today, including electronics.

And Xbox players aren’t the first gamers to feel impacts amid these ongoing trade wars. Last month, Sony, for example, raised its recommended retail pricing for PlayStation 5 consoles in select markets — including countries in Europe, the Middle East and Africa, as well as Australia and New Zealand. At the time, the company cited “a challenging economic environment, including high inflation and fluctuating exchange rates.”

Preorders for Nintendo’s highly-anticipated Switch 2 were also delayed in April as retailers assessed the potential impact of tariffs. Nintendo later confirmed that some Switch 2 accessories would see price adjustments — but maintained that its previously-announced baseline price for the console, $449.99, would remain the same.

The starting $449.99 price for the Switch 2 is significantly higher than the original Switch’s $299 price tag. And while new bells and whistles may account for a sizable portion of that hike, experts have previously noted that new import taxes are also a contributor.

While companies across industries have already shared weaker or cloudy outlooks amid tariff uncertainty, larger impacts on their bottom lines may not be seen until farther down the road. The Xbox price hikes were announced just one day after Microsoft posted a strong earnings report.

For the January-March quarter, the Redmond, Washington-based company raked in $70.07 billion in revenue, with a net income of $25.8 billion. Microsoft also saw a 6% increase for revenue in its personal computing unit, which includes its laptop business and Xbox services. But that was before many of Trump’s latest tariffs took effect.

Stocks rallied in afternoon trading on Wall Street Friday following a stronger-than-expected report on the U.S. job market.

The S&P 500 gained 1.6%, putting the index on track for a ninth straight day of gains. That would mark the longest winning streak for the benchmark index in two decades.

The Dow Jones Industrial Average rose 582 points, or 1.4%, as of 2:35 p.m. Eastern. The Nasdaq composite rose 1.8%.

The gains were broad. Roughly 90% of stocks and every sector in the S&P 500 advanced. Technology stocks were among the companies doing the heaviest lifting. Microsoft rose 2.6% and Nvidia rose 3%. Apple, however, fell 4% after the iPhone maker estimated that tariffs will cost it $900 million.

Banks and other financial companies also made solid gains. JPMorgan Chase rose 2.4% and Visa added 1.3%.

Employers added 177,000 jobs in April. That marks a slowdown in hiring from March, but it was solidly better than economists anticipated. However, the latest job figures don’t yet reflect the effects on the economy of President Donald Trump’s across-the-board tariffs against America’s trading partners. Many of the more severe tariffs that were supposed to go into effect in April were delayed by three months, with the notable exception of tariffs against China.

“We’ve already seen how financial markets will react if the administration moves forward with their initial tariff plan, so unless they take a different tack in July when the 90-day pause expires, we will see market action similar to the first week of April,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management.

The S&P 500 slumped 9.1% during the first week of April as Trump announced a major escalation of his trade war with more tariffs. The market has now clawed back its losses since then, helped by a string of resilient earnings reports from U.S. companies, hopes for de-escalation of trade tensions with China and expectations that the Federal Reserve will still be able to cut rates a few times this year.

The job market is being closely watched for signs of stress amid trade war tensions. Strong employment has helped fuel solid consumer spending and economic growth over the last few years. Economists are now worried about the impact that taxes on imports will have on consumers and businesses, especially about how higher costs will hurt hiring and spending.

The economy is already showing signs of stress. The U.S. economy shrank at a 0.3% annual pace during the first quarter of the year. It was slowed by a surge in imports as businesses tried to get ahead of Trump’s tariffs.

The current round of tariffs and the on-again-off-again nature of Trump’s policy has overshadowed planning for businesses and households. Companies have been cutting and withdrawing financial forecasts because of the uncertainty over how much tariffs will cost them and how much they will squeeze consumers and sap spending.

Hopes remain that Trump will roll back some of his tariffs after negotiating trade deals with other countries. China has been a key target, with tariffs of 145%. Its Commerce Ministry said Beijing is evaluating overtures from the U.S. regarding the tariffs.

Investors had a relatively quiet day of earnings reports following a busy week. Exxon Mobil was up 0.6%, recovering from an early slide, after reporting its lowest first-quarter profit in years. Rival Chevron rose 1.6% after it also reported its smallest first-quarter profit in years.

Falling crude oil prices have weighed on the sector. Crude oil prices in the U.S. are down about 17% for the year. They fell below $60 per barrel this week, which is a level at which many producers can no longer turn a profit.

Block slumped 20.5% after reporting a sharp drop in first-quarter profit that fell short of analysts’ forecasts. The financial technology company behind Cash App cited a pullback in consumer spending on travel and other discretionary items as a key reason for the results.

Treasury yields rose in the bond market. The yield on the 10-year Treasury rose to 4.32% from 4.22% late Thursday.

Apple CEO Tim Cook said Thursday that the majority of iPhones sold in the U.S. in the current fiscal quarter will be sourced from India, while iPads and other devices will come from Vietnam as the company works to avoid the impact of President Trump’s tariffs on its business.

Apple’s earnings for the first three months of the year topped Wall Street’s expectations thanks to high demand for its iPhones, and the company said tariffs had a limited effect on the fiscal second quarter’s results.

Cook added that for the current quarter, assuming things don’t change, Apple expects to see $900 million added to its costs as a result of the tariffs, but Cook said the company remains “confident” in this business.

The Cupertino, California-based company earned $24.78 billion, or $1.65 per share, in the first three months of the year, up 4.8% from $23.64 billion, or $1.53 per share, in the same period a year earlier.

Revenue rose 5.1% to $95.36 billion from $90.75 billion.

Analysts, on average, were expecting earnings of $1.62 per share on revenue of $94.19 billion, according to a poll by FactSet.

The numbers for the January-March period provide a snapshot of how Apple was faring before President Trump’s unveiling of sweeping tariffs in April that rattled the financial markets amid fears a trade war would reignite inflation and shove the U.S. economy into a recession.

“While it is likely that some of the sales growth was driven by consumers accelerating purchases ahead of expected tariff increases, margins remained healthy on the other side of the balance sheet,” said Thomas Monteiro, an analyst at Investing.com. He added that the company “still has room for maneuver” regardless of the economic backdrop and will “likely not need to significantly deplete cash reserves to keep moving the needle.”

Apple’s reliance on Chinese factories to make its iPhones and other devices thrust the technology trendsetter into the crosshairs of Trump’s trade war. The exposure caused Apple’s stock price to plunge 23% shortly after the president announced the severity of the reciprocal tariffs, temporarily erasing $773 billion in shareholder wealth in the process.

Most of those losses have since been recovered after Trump temporarily exempted iPhones and other electronics from the reciprocal tariffs, but Apple’s stock remains down by nearly 5% since the April fusillade of tariffs.

Besides the trade war, Apple has been hurt by its inability to live up to its own hype surrounding artificial intelligence features on the iPhone 16 lineup that came out last fall.

The technology wasn’t ready when the iPhone 16 went on sale. Some AI features have rolled out in parts of the world as part of software updates, but Apple still hasn’t been able to live up to its original promise to make Siri smarter and more versatile. The missteps prompted Apple to pull advertising campaigns promoting AI breakthroughs on the iPhone, although the company still intends to release more features powered by the technology at some point.

Apple had been counting on its late entry into the AI craze to revive demand for the iPhone after last year’s sales dipped 2% from 2023’s levels. Apple said Wednesday that its phone sales climbed 1.9% to $46.84 billion for the first three months of the year. Wall Street had expected iPhone sales of $45.62 billion.

But the company continues to see its China business decline, with revenue from the Greater China region down 2.3% to $16 billion for the quarter. Other regions, including the Americas, Europe and the rest of Asia, saw sales increases.

When Trump initially indicated his 145% tariffs on Chinese-made goods would apply to the iPhone, U.S. consumers rushed to stores to buy new devices rather than risk prices spiking higher after the duties began driving up costs. But the flurry of panic buying won’t show up until Apple reports its results for the April-June quarter this summer.

Trump’s trade war has ramped up the pressure on Cook to work the same diplomatic sleight of hand that enabled the iPhone to avoid being stung by the China tariffs that the president imposed during his first administration.

Cook signaled his intention remain on good terms with Trump by arranging private meetings with him and personally donating $1 million to the president’s second inauguration ceremony before sitting on the dais when Trump was sworn into office on January 20. Apple subsequently announced plans to invest $500 billion in the U.S. while hiring 20,000 workers during the next four years.

Trump’s trade war also is prompting a push to Apple to shift all the production of the iPhones that it sells in the U.S. from China to India, where the company has been building up its supply chain for the past seven years, according to a recent story in the Financial Times. But the complicated logistics of making such a huge move likely couldn’t be completed until next year, at the earliest, leaving Apple vulnerable to the vagaries of Trump’s trade war.

Apple’s stock fell $5.81, or 2.7%, to $207.51 in after-hours trading.

The first 100 days of Donald Trump’s presidency have been bad for the stock market. Since Trump took office on January 21, the Dow is down 7.23%, the S&P 500 is down 7%, and the economy contracted by 0.3% in Q1. It looks like the first chapter of an impending recession. Some companies, however, are making a silk purse of this sow’s ear economy. Take Palantir, the tech, surveillance, and military contractor co-founded by chairman Peter Thiel and CEO Alex Karp.

Thiel named the company for the seeing stone in J.R.R. Tolkien’s Legendarium, a compendium of background myths for The Lord of the Rings. Palantir was intended to use software similar to PayPal’s fraud recognition systems to “reduce terrorism while preserving civil liberties.” Instead, it became a data-mining and surveillance juggernaut, selling its data analysis services to governments and private companies. Palantir’s software was reportedly behind the intel that led SEAL Team 6 to capture Osama bin Laden in 2011.

Palantir’s growth has been nothing short of spectacular, with the share price up 586% since the beginning of 2023, and this year it is the best performer among companies valued at $5 billion or more, according to FactSet. What’s behind the rise? Palantir’s artificial-intelligence-enabled tools, which allow clients to mine vast data sets for insights and patterns, and, Palantir claims, give them a competitive edge.

They have helped it win defense and software contracts with key U.S. government agencies, including the military. In the fourth quarter, its government revenues jumped 45% year-over-year to $343 million. The past two years’ growth was helped by Palantir’s inclusion in both the S&P 500 and the Nasdaq. And that is only likely to accelerate under the Trump administration, as DOGE drives efforts to outsource tech work to save money, William Blair analyst Louie DiPalm told CNBC.

“Palantir’s business model is highly aligned with the priorities of the Trump administration in terms of increasing agility and being very quick to market,” he said.

The visibility of these government contracts has boosted Palantir’s growth in the corporate sector.

“When you think about macroeconomic concerns, you as a company need to be more efficient, and this is where Palantir thrives," said Bank of America analyst Mariana Pérez.

That positions Palantir for a vast increase in private-sector contracts, which could fuel further growth.

The rapid growth in the midst of an AI arms race, and its “strategic positioning in the AI-value chain” have Morningstar analyst Mark Giarelli convinced Palantir could be “the next software juggernaut.” He’s raised his fair value estimate to $90 from $79. He sees a huge boost from DOGE contracts, and particularly from Palantir’s AI platform, which he calls “a revenue accelerant” for its adaptability: “While most of this customer and revenue acceleration is driven by US enterprises, even a fraction of this growth replicated in Western Europe could provide additional upside to our valuation.”

Meanwhile, analyst Joseph Bonnar at Argus warned in a recent note that Palantir’s biggest challenge may be running out of high-end clients who need and can afford its tailor-made AI models. In fact, Palantir leaders have complained that European companies are not buying its products because of an anti-American bias. That’s a problem, or at least it is for now, as its use by the US. national security community means sales are limited to vetted U.S. allies.

Argus’s Bonner points to the leadership of Karp, whom Time Magazine called “an unashamed techno-nationalist who evangelizes Western power,” as a potential restraint in sales in Europe, suggesting that clients could shun Palantir for its political stances, much as Tesla has lost sales due to Elon musk‘s political activism.

“Mr. Karp takes wide-ranging political outspokenness to another level,” wrote Bonner. While he still has a buy on Palantir, noting its 78% operating profit growth in the fourth quarter of 2024 (first quarter results are in next week), he wrote that Palantir shares are up more than 500% in the past 12 months. That, he said, makes Palantir “perhaps too richly valued for the company fundamentals to handle.”

Indeed, Palantir is valued at about 185 times earnings—one of the highest price-to-earnings multiples in software, and a position that makes its future something of a tightrope walk.

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• Is Pichai panicking? Google CEO Sundar Pichai wants the federal judge running the trial of his company on antitrust charges to reject the Justice Department’s plan to force Google to break up its search business. Judge Amit Mehta already ruled that Google holds an illegal monopoly over online search. He’s now hearing arguments over how to restore competition. Pichai sounded a bit nervous as he warned of the consequences of opening up Google’s search engine to legal competition. “It would be trivial to reverse engineer and effectively build Google search from the outside,” Pichai said, and if Google rivals could do that, he added, it would be a death knell for the world’s fifth largest company by market cap (worth just under $2 trillion). “It’s not clear to me how we would have any value to our IP” if the DOJ’s plan is adopted, he said.
• Up the Amazon without a paddle: It didn’t take more than a couple of hours before Donald Trump yanked Amazon chief Jeff Bezos’s leash. Early Tuesday, media reports circulated that Amazon’s Haul shopping site planned to post the additional cost of tariffs on each item, much the way the site calculates sales tax by state. White House spokewoman Karoline Leavitt called the move “a hostile and political act by Amazon.” Within minutes Trump was on the phone to the man he once called Jeff Bozo, and the game was over. In a statement, Haul said the idea “was never approved and is not going to happen.” Then Trump publicly gave Bezos a pat on the head. “Jeff Bezos was very nice. He was terrific,” Trump told reporters on Tuesday. “He solved the problem very quickly. Good guy.”

I wonder if Amazon will also explain to the American public why its profit margin must increase every single year and how much Jeff Bezos's $500 million wedding will cost each customer.

They are playing a dangerous political game. pic.twitter.com/OOEtil9aJL

• Turnaround takes time: Starbucks’ same-store sales fell in the U.S. and international stores as new CEO Brian Niccol conceded that his turnaround plan was taking time to deliver. A new algorithm on sequencing orders is speeding up delivery of coffee orders by two minutes, the company said, and it’s restaffing shops with more baristas to meet demand. “I’ve led other turnarounds and everything I’ve seen tells me we’re on the right track,” Nicoll said on an investor call, even as shares slid 7% overnight after the earnings report.
• Downsizing UPS: United Parcel Service is firing 20,000 workers and closing 73 buildings as it cuts ties with Amazon. In January UPS said the margins on its last-mile delivery for Amazon packages were too thin to be worth the effort. Last year UPS cut 12,000 jobs, mostly managers, and shut 11 buildings. Some 330,000 UPS employees are members of the Teamsters Union, whose leader, Sean O’Brien, said the union contract requires creating 30,000 union jobs. “UPS will be in for a hell of a fight” if it tries to eliminate Teamsters jobs, he said.
• Coke on ICE: Coca-Cola execs blame a fake viral video for falling soft-drink sales in Mexico, triggering a 3% drop in North American sales, but the company conceded an 8% rise in prices could also have contributed to the sales issues. Net revenue dropped 2% globally, but the company’s operating profit margin rose to 32.9% from 18.9% a year earlier.
• Say goodbye to that Spirit in the sky: Spirit Aerosystems (not the yellow airline) has a friend in Airbus. The airplane fuselage and parts maker spun off from Boeing decades ago, and was on track to be reacquired this year for $4.7 billion, selling off the units that make parts for Boeing rival Airbus. But in a script-flipping deal, Spirit will now pay Airbus to take over the lines in more than half a dozen of its factories around the world. In total, Airbus says it will receive $439 million from Spirit and in exchange extend a $200 million credit line to the facilities.
• Sue blue: American Airlines is mad at Jet Blue, and they’ve got the lawyers to prove it. In a pair of lawsuits filed this week, American said it’s suing for breakup fees after talks on a new partnership ended, and it’s also filed suit over the Northeast Alliance, a 2020 relationship between the two that ended when a court found it was suppressing competition.
• Meta’s cooking: Facebook parent Meta said it’s coping well with the transition to a more AI-based online world. Q1 revenue was up 16% to $42.31 billion, beating Bloomberg’s consensus analyst estimate of $41.38 billion, while profits rose 35% to $16.64 billion. Meta’s stock rose more than 5% in after-hours trading shortly after the results. The company said it’s boosting its investment in AI hardware from $64 billion to $72 billion for 2025. Shares are down 6.6% since Trump took office.
• Slated for Indiana: Slate, the Jeff Bezos–funded EV startup promising a two-seater pickup or SUV for under $25,000, will open in a former printing plant in Warsaw, Indiana. It expects to make its first deliveries by the end of 2026.

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The Trump Tariff Turmoil has gotten so unpredictable that companies including General Motors, JetBlue, Volvo, Delta Airlines, and UPS say they have no idea how their businesses will do over the next three months, let alone the next year, and they’ve abandoned the Wall Street tradition of issuing guidance to investors and analysts.

Call it throwing in the towel, or more accurately the PowerPoint. Usually, CFOs, economists, and a squad of spreadsheet wizards spend months plotting the income and sales they expect for the next quarter or year—they count sales that are in the pipeline and deals that are already closed, and the cost of parts and labor. They compile complex forecasts of Christmas spending, which they plug into the evolving size and weight of Christmas packages (in UPS’s case) or the number of people who’ll fly home for the holidays (in Delta’s case).

But the uncertainty over Trump’s on-again, off-again tariffs has clouded American businesses’ crystal balls. U.S. companies are being forced to throw away the operational maps they’ve refined over years, making it impossible to deliver an accurate earnings forecast.

“The world hasn’t been faced with such enormous potential impacts to trade in more than 100 years,” UPS chief executive Carol Tomé told analysts and investors on an earnings call last week. “The only thing we’re certain of is we don’t know which, if any, of our scenarios will play out.”

Investors and analysts—and the companies themselves—need to be able to forecast sales and earnings, because without these numbers, the markets become a roiling sea of uncertainty.

A Harris Poll released this week showed 84% of senior business leaders were concerned by the current political and legal environment’s impact on their business, with both conservative and liberal business leaders sweating bricks. And 45% of business leaders said Trump’s executive orders and policies have “negatively affected” their business’s ability to compete.

• No dolls for Christmas: Donald Trump shrugged off concerns that there may be a toy shortage at Christmas after the chiefs of Walmart and Target warned him last month that the 145% tariffs on China mean store shelves will be empty by mid-May. (Christmas toy orders need to be made now in order to be filled in time to arrive at U.S. retailers for the holiday shopping season. Taking questions after a cabinet meeting on Wednesday, Trump said: “Well, maybe the children will have two dolls instead of 30 dolls, you know? And maybe the two dolls will cost a couple of bucks more than they would normally.” No word from the North Poll on whether elves will be pulling double shifts to make up for the lost toys.

Trump on China: "They made a trillion dollars with Biden selling us stuff. Much of it we don't need. Somebody said, 'oh, the shelves are gonna be open.' Well, maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more." pic.twitter.com/6gVbGQ6oJ2

• The Don backs down: Remember Donald Trump’s demand that Ukraine hand over its rare earth minerals in exchange for U.S. military aid in evicting Russia’s invading army? Well, the deal was signed, and it sure looks like Ukraine comes out a winner. Under the terms released to the media, the profits from Ukraine’s mineral sales will be put into the United States–Ukraine Reconstruction Investment Fund, managed jointly by Ukraine and the U.S. The two will decide on how to invest the profits in minerals, oil, and gas production. The U.S. may add money to the fund, said Ukraine’s deputy prime minister, Yulia Svyrydenko, adding that Ukraine retains full ownership of the resources on its territory. Most notably, despite all of the Don’s fulminating over Ukraine having to pay back Uncle Sam for the missiles and tanks it’s received, the agreement has no provision for Ukraine to owe the U.S. anything.
• Of CHIPS and SHIPS: Among his first moves in taking office, Trump slashed what he could from Joe Biden’s CHIPS Act, a set of government loans and subsidies aimed at reshoring computer chip manufacturing to the U.S., a particularly important move in light of China’s repeated threats to invade Taiwan, where many of the world’s key chips are made. Trump lashed out at the corporate welfare plan. But now the GOP-led Congress is reintroducing a Biden-era bill to have the government invest in (and subsidize) U.S. shipyards. The Shipbuilding and Harbor Infrastructure for Prosperity and Security for America Act (SHIPS) would offer tax breaks and create a government trust fund to invest in shipbuilding. Sound familiar? But ships may not be as easy to build as chips. The goal is to add 250 U.S.-built freight ships over the next 10 years. China, meanwhile, had an order book last year of 3,419 commercial ships.
• Dry docks: Speaking of ships, the TTT is shutting down trans-Pacific container ship traffic. Bookings for ships to take Asian-made goods to the U.S. are down at least a third for the world’s five largest container ship operators, and the Port of Los Angeles expects container arrivals to drop 30.4% this week, after 17 sailings were canceled for May, the Wall Street Journal reported. “The Chinese economy has taken the first hit” from Trump’s 145% tariff on Chinese goods, Deutsche Bank’s chief China economist wrote in a report this week. “The shock to the U.S. economy will be delayed, as those goods will not arrive in U.S. ports until a few weeks later, and importers can run on inventories for one to two months.”

Is Elon Musk getting the boot? Tesla’s board is hunting for a new CEO, even after Musk promsied to step back from chainsawing the federal bureaucracy and spend more time with Tesla. About a month ago, as Tesla’s stock was sinking, the board got serious about looking for a successor, according to The Wall Street Journal, and has now hired an executive search form to find a new CEO. Tesla’s board denied the report in a post on, of course, X.

At a Cabinet meeting on Wednesday, Trump thanked Musk for his work. “You know you’re invited to stay as long as you want,” Trump said. “I guess he wants to get back home to his cars.” Tesla’s profits plunged 71% in the first quarter, and its share price is down 33% since peaking just days before Trump’s inauguration. Musk owns about 13% of Tesla, and last year a Delaware judge blocked the company from giving Musk a multi-year pay package worth $50 billion, more or less.

Earlier today, there was a media report erroneously claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search at the company.

This is absolutely false (and this was communicated to the media before the report was published).

The CEO of Tesla is…

For the first time since the end of the Covid pandemic, the U.S. economy experienced a full quarter of decline in economic output, the first sign of an impending recession. Gross Domestic Product fell at an annualized rate of 0.3% in Q1 of 2025. What growth there was was largely due to a massive boost in imports to get ahead of tariffs, with imports up 41% over a year earlier, the steepest increase since 1972.

It’s not good news, said Ernst & Young chief economist Greg Daco: “This artificial front-loading of demand sets the stage for a sharper demand cliff in Q2—a far more troubling phase of the ongoing economic slowdown.”

Americans from CEOs to shoppers are saying they didn’t sign up for tariff-led inflation and DOGE-led unemployment. But Trump told ABC News interviewer Terry Moran on Monday that the people are getting what they voted for. “Well, they did sign up for it, actually, and this is what I campaigned on,” Trump said.

“President Trump’s tariffs are holding growth hostage,” wrote The Wall Street Journal’s notoriously conservative editorial board. “The best response to the warning from the first-quarter GDP decline would be for Mr. Trump to call the whole tariff thing off.” Net exports, the difference between what the U.S. imports and exports, subtracted nearly 5 percentage points from headline GDP. That was the biggest quarterly drag from net exports on record dating back to 1947.

The news sent the stock market down, but Trump had a ready answer for that: “This is Biden’s Stock Market, not Trump’s,” Trump wrote Wednesday on Truth Social. “I didn’t take over until January 20th.” That’s a far cry from Trump’s Truth Social post last fall when he said, “This is the Trump stock market because my polls against Biden are so good that investors are projecting that I will win.”

None of this is good for companies or the economy, as consumers are spending less, even on basics. “Uncertainty creates a pensive and anxious consumer,” Colgate-Palmolive CEO Noel Wallace said last week, when the company lowered its earnings estimate. “You see consumers destock their pantries and not necessarily buy that extra toothpaste tube or that extra body wash.”

The turmoil could easily drive the economy onto the rocks and provoke a massive recession, which is generally defined as two consecutive quarters of negative growth. For now, it’s left the Fed, whose dual mandate is to keep inflation down and employment up, in a bind: Tariff-induced shortages will drive up prices, even as employment drops because the cost of producing goods (and everything associated with that) is rising. Last month Fed chair Jerome Powell warned that would create a “challenging scenario” for the bank, because raising interest rates to address inflation could worsen unemployment, and vice versa.

“If the administration can’t find an off-ramp on the tariffs soon…then I think we’re going to see a lot more negative GDP numbers dead ahead, and ultimately job losses,” said Mark Zandi, chief economist at Moody’s.

NEW YORK (AP) — Microsoft and Meta Platforms are driving Wall Street higher on Thursday after reporting profits for the start of the year that were even bigger than analysts expected.

The S&P 500 was up 1.2% in afternoon trading and heading for an eighth straight gain, which would be its longest winning streak since August. The Dow Jones Industrial Average was up 253 points, or 0.6%, as of 1:17 p.m. Eastern time, and the Nasdaq composite was 2.2% higher.

Microsoft jumped 8.6% after the software giant said strength in its cloud computing and artificial intelligence businesses drove its overall revenue up 13% from a year earlier.

Meta, the parent company of Facebook and Instagram, also topped analysts’ targets for revenue and profit in the latest quarter. It said AI tools helped boost its advertising revenue, and its stock climbed 5.1%.

The two are some of the most influential stocks within the S&P 500 and other indexes because of their massive sizes, but they weren’t alone. CVS Health, Carrier Global and a bevy of other companies also joined the stream of better-than-expected profit reports that have helped steady Wall Street over the last week. The S&P 500 is back to within 8.3% of its record set earlier this year, after briefly dropping nearly 20% below the mark.

Still, plenty of uncertainty remains about whether President Donald Trump’s trade war will force the economy into a recession. And even though companies have been reporting better profits for the first three months of the year than analysts expected, many CEOs are remaining cautious about the rest of the year.

General Motors cut its forecast for profit in 2025, for example. It said it’s assuming it will feel a hit of $4 billion to $5 billion because of tariffs. GM’s stock nevertheless rose 0.1%. The automaker said it expects to offset at least 30% of the tariff impact.

McDonald’s fell 1% after reporting weaker revenue for the latest quarter than analysts expected, even though its profit was slightly above forecasts. An important underlying measure of performance at its U.S. restaurants had its worst decline since 2020, when COVID shuttered the global economy, and McDonald’s CEO Chris Kempczinski said consumers “are grappling with uncertainty.”

McDonald’s joined Chipotle and other restaurant chains that have seen customers get more cautious amid all the unknowns about the economy and inflation that’s still higher than many people would like.

The uncertainty has already shown up in surveys of consumers, which say pessimism is shooting higher about where the economy heading. On Thursday, a couple reports about the economy came in mixed, following up on several recent updates that have suggested it’s weaker than expected.

The first of the reports said more U.S. workers filed for unemployment benefits last week than economists had forecast, setting the stage for a more comprehensive report on the job market arriving Friday.

But a later update said U.S. manufacturing activity was better last month than economists had feared, though it still contracted again.

The fear on Wall Street is for a possible worst-case scenario called “stagflation,” where the economy stagnates yet inflation remains high. It’s hated because the Federal Reserve has no good tools to fix both problems at the same time. If the Fed were to try to help one problem by adjusting interest rates, it would likely make the other worse.

Some encouraging news on inflation arrived Wednesday, when a report said that the measure of inflation the Fed likes to use slowed in March.

In the bond market, Treasury yields swiveled following Thursday’s economic reports. The yield on the 10-year Treasury initially fell below 4.13% after the worse-than-expected update on joblessness. But it later trimmed its losses following the better-than-expected report on manufacturing and rallied to 4.21%. That’s up from 4.17% late Wednesday.

In stock markets abroad, trading was closed in many countries for May Day, or international Labor Day holidays.

Tokyo’s Nikkei 225 rose 1.1% after the Bank of Japan kept its benchmark interest rate unchanged, as many investors expected.

Hopes that Trump may eventually roll back some of his tariffs after reaching trade deals with other countries also helped to support markets.

A social media blog by China’s state broadcaster claimed that the Trump administration has been seeking contact with the world’s second largest economy through multiple channels to start negotiations over tariffs.

Artificial intelligence “agents” are supposed to be more than chatbots. The tech industry has spent months pitching AI personal assistants that know what you want and can do real work on your behalf.

So far, they’re not doing much.

Visa hopes to change that by giving them your credit card. Set a budget and some preferences and these AI agents — successors to ChatGPT and its chatbot peers — could find and buy you a sweater, weekly groceries or an airplane ticket.

“We think this could be really important,” said Jack Forestell, Visa’s chief product and strategy officer, in an interview. “Transformational, on the order of magnitude of the advent of e-commerce itself.”

Visa announced Wednesday it is partnering with a group of leading AI chatbot developers — among them U.S. companies Anthropic, Microsoft, OpenAI and Perplexity, and France’s Mistral — to connect their AI systems to Visa’s payments network. Visa is also working with IBM, online payment company Stripe and phone-maker Samsung on the initiative. Pilot projects begin Wednesday, ahead of more widespread usage expected next year.

The San Francisco payment processing company is betting that what seems futuristic now could become a convenient alternative to our most mundane shopping tasks in the near future. It has spent the past six months working with AI developers to address technical obstacles that must be overcome before the average consumer is going to use it.

For emerging AI companies, Visa’s backing could also boost their chances of competing with tech giants Amazon and Google, which dominate digital commerce and are developing their own AI agents.

The tech industry is already full of demonstrations of the capabilities of what it calls agentic AI, though few are yet found in the real world. Most are still refashioned versions of large language models — the generative AI technology behind chatbots that can write emails, summarize documents or help people code. Trained on huge troves of data, they can scour the internet and bring back recommendations for things to buy, but they have a harder time going beyond that.

“The early incarnations of agent-based commerce are starting to do a really good job on the shopping and discovery dimension of the problem, but they are having tremendous trouble on payments,” Forestell said. “You get to this point where the agents literally just turn it back around and say, ‘OK, you go buy it.’

Visa sees itself as having a key role in giving AI agents easier and trusted access to the cash they need to make purchases.

“The payments problem is not something the AI platforms can solve by themselves,” Forestell said. “That’s why we started working with them.”

The new AI initiative comes nearly a year after Visa revealed major changes to how credit and debit cards will operate in the U.S., making physical cards and their 16-digit numbers increasingly irrelevant.

Many consumers are already getting used to digital payment systems such as Apple Pay that turn their phones into a credit card. A similar process of vetting someone’s digital credentials would authorize AI agents to work on a customer’s behalf, in a way Forestell says must assure buyers, banks and merchants that the transactions are legitimate and that Visa will handle disputes.

Forestell said that doesn’t mean AI agents will take over the entire shopping experience, but it might be useful for errands that either bore some people — like groceries, home improvement items or even Christmas lists — or are too complicated, like travel bookings. In those situations, some people might want an agent that “just powers through it and automatically goes and does stuff for us,” Forestell said.

Other shopping experiences, such as for luxury goods, are a form of entertainment and many customers still want to immerse themselves in the choices and comparisons, Forestell said. In that case, he envisions AI agents still offering assistance but staying in the background.

And what about credit card debt? The credit card balances of American consumers hit $1.21 trillion at the end of last year, according to the Federal Reserve of New York.

Forestell says consumers will give their AI agents clear spending limits and conditions that should give them confidence that the human is still in control. At first, the AI agents are likely to come back to buyers to make sure they are OK with a specific airplane ticket. Over time, those agents might get more autonomy to “go spend up to $1,500 on any airline to get me from A to B,” he said.

Part of what is attracting some AI developers to the Visa partnership is that, with a customer’s consent, an AI agent can also tap into a lot of data about past credit card purchases.

“Visa has the ability for a user to consent to share streams of their transaction history with us,” said Dmitry Shevelenko, Perplexity’s chief business officer. “When we generate a recommendation -- say you’re asking, ‘What are the best laptops?’ — we would know what are other transactions you’ve made and the revealed preferences from that.”

Perplexity’s chatbot can already book hotels and make other purchases, but it’s still in the early stages of AI commerce, Shevelenko says. The San Francisco startup has also, along with ChatGPT maker OpenAI, told a federal court it would consider buying Google’s internet browser, Chrome, if the U.S. forces a breakup of the tech giant in a pending antitrust case.