WSJ What’s News - Profits Boom for America’s Biggest Companies

Episode Date: August 31, 2026

P.M. Edition for Aug. 31. The second quarter was a good one for S&P 500 companies. Per-share earnings soared 53% and many companies have raised their guidance. WSJ reporter Theo Francis explains what’s propelling those gains. Plus, the Federal Trade Commission sues Amazon for allegedly manipulating prices for ads on its site—and making billions from merchants. And the Supreme Court allows President Trump to keep building his White House ballroom. Pierre Bienaimé hosts. Sign up for the WSJ's free What's News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The FTC sues Amazon for allegedly manipulating the prices it charges advertisers. Plus, the predictions platform Kalshi issues its first lifetime ban on former Congressman George Santos. And America's biggest companies had a hot quarter. These are the best earnings per share gains year over year that we've seen since right after the pandemic shutdowns. And the same holds for revenue gains. These are really big. It's Monday, August 31st. I'm Pierre Bienn-A for the Wall Street Journal, filling in for Alex O'Sullough. This is the PM edition of What's News, the top headlines and business stories that move the world today.

We start today's show in Washington, where the Supreme Court is allowing President Trump to keep building his White House ballroom. That clears the way for one of the president's prized projects. In a five-to-four ruling today, the high-quart. Court said that a historic preservation group likely doesn't have legal standing to challenge the project and that the Trump administration would suffer irreparable harm if the project were stopped now. Chief Justice John Roberts and the court's three Democratic appointed justices dissented. The betting website Kalshi is banning former Republican Representative George Santos for life. Calshe says it's the company's first lifetime ban. It's also fining Santos over $70,000.

The Commodity Futures Trading Commission alleges that Santos placed bets on whether he would be at President Trump's State of the Union address. He made misleading social media posts suggesting he would attend, but then he didn't. Santos's attorney didn't immediately respond to requests for comment. Kashi's crackdown follows concerns in Washington about insider trading on prediction markets. The company announced several other disciplinary actions today, including a three-year ban for a Republican congressional candidate in North Carolina. federal trade commission sued Amazon today, saying that the company manipulated prices for ads on its platform. The agency says that made Amazon tens of billions of dollars over seven years. The FTC filed the complaint along with more than 20 state attorneys general. It says Amazon

secretly raised the minimum price companies had to pay to place ads. The FTC says that in recent years, Amazon did this 70 to 80 percent of the time. Amazon says it properly described how its ad auctions work to advertisers. At America's biggest companies, profits are booming, and their leaders say that's not likely to change soon. For every company in the S&P 500 that lowered their profit guidance for the current quarter, roughly two companies raised it. One big reason for that optimism, Americans keep spending and giving a big boost to sales.

Teo Francis covers U.S. companies for the Wall Street Journal, and he joins me now. Teo, you write that across S&P 500 companies per share earnings soared 53% in the second quarter compared to last year, while sales rose nearly 16%. So big companies are doing really well right now. Why? These are the best earnings per share gains year over year that we've seen since, you know, right after the pandemic shutdowns in mid-20201. And the same holds for revenue gains. These are really big. Consumer spending is holding up. You're seeing a lot of spending on the AI buildout. And remember, data centers are buildings.

That's construction equipment, construction workers, equipment, and wiring. And so there's a lot of capital spending generally. And then you have other factors like the tariff-free funds, which are temporary. But for this quarter, they certainly have been a nice bump to the bottom line for a lot of companies. Right. A bunch of companies have cited their tariff-free funds. in recent earnings calls. There's the food company, J.M. Smucker. The increase reflects $115 million of tariff-free funds.

Garmin, which makes smartwatches and other fitness gear. My payable product nick and tariff-free funds are approximately $21 million. As well as the big box retailers target. Our Q2 P&L included a $994 million pre-tax benefit from tariff refunds. And Walmart. We were eligible for approximately $2.9 billion of tariff refunds. That all amounts to a lot of money. In your story, you cite an estimate from the private equity firm Apollo that the refunds are likely to account for more than 4% of third quarter growth for the U.S. economy.

But also helping these companies are the booming stock market and high home prices, right? That's right. That's what economists like to call the wealth effect. You know, if your stock portfolio or your home price is doing nicely, you're more likely to go out and spend money on things. At the same time, there are plenty of Americans who don't have big stock portfolios, and a lot of them are feeling pinched. And so, you know, the spending you're seeing is more from the higher end of the income and wealth continuum than people at the lower end. Theo Francis covers U.S. companies for the Wall Street Journal. Teo, thanks so much. Thank you.

Coming up, the Met has canceled the high-profile gala that was planned to honor controversial designer John Gagliano. That and more after the break. The Metropolitan Museum of Art has canceled the Met Gala and exhibit honoring John Galeano. after controversy about anti-Semitic and anti-Asian comments the designer has made in the past. Gagliano and the Met issued a joint statement today. He said that it was best for the events not to proceed. And he said he remains, quote, deeply sorry for those remarks. After those comments in 2011, Gagliano was convicted of a crime in France and fired from his roles at luxury brands.

He said that he was drunk and struggling with substance abuse at the time. Kave Libre, who covers fashion and culture for the Wall Street Journal, says the Mets' plans were controversial from the start. Even though Galliano has tried to make amends with the Jewish community, there's been a lot of backlash against the exhibit and the fact that the Mets wants to celebrate a character like this. And then on the other hand, the MET had said that they were planning on addressing

the anti-Semitic remarks that happened in the past. So it was going to be a part of the overall exhibit, but people still felt like he was not a person to be celebrated in this way because the exhibit and the gala and just the overall. recognition is really like the pinnacle of someone's career in fashion. And Chavi says that before today's cancellation, the fashion industry had been reembracing Galliano. He was appointed at Mason Margiela, and he also recently had a collaboration with Zara.

So people felt like he was coming back into the fold and he was being redeemed, and this was sort of his comeback. The museum says it will name a new focus for next year's gala. The event is usually in May. In the Grand Canyon, at least two people have died and more than a dozen are missing. More than 60 people were evacuated after a weekend of heavy rain caused floods in parts of the National Park in Arizona, and meteorologists said more thunderstorms were likely this week. And in markets, renewed fighting in the Strait of Hormuz sent Brent crude futures back above $90 a barrel.

U.S. forces attacked two Iranian rocket launchers in the waterway yesterday, the first American strike in weeks. The Dow, S&P, and NASDAQ all fell today by less than 1%. But for the month, the three major benchmarks still finished in the green. They were each up 1.3% or more. The utilities PG&E and Edison International both felt 20% or more today, after California lawmakers rejected an effort by Governor Gavin Newsom to shield publicly traded utilities from wildfire-related lawsuits. While Los Angeles County sued State Farm today over its handling of insurance claims

after last year's wildfires. The county said that delays and denials of claims violated unfair competition laws. State Farm says it disagrees with the county's characterization of how it handled wildfire claims. The fast-fashioned company Sheehan is going public in Hong Kong tomorrow. Wall Street Journal reporter Esther Fung says the company is holding its IPO while reckoning with steep competition and the Trump administration's changes to trade rules. In 2024, Sheen's revenue growth from the U.S. fell due to heavier competition from Temu,

a really fierce rival of Sheen. And last year, Sheen's U.S. revenue was hurt after the government scrapped a tariff exemption for low value packages entering the U.S. This is one of the many changes that the Trump administration made to global trade with the U.S. these tariff exemptions underpinned Sheen's business model. So when the U.S. government removed that, Sheen had to pivot. A few months ago, it said that it is going to purchase Evelyn. And it also wants to be a marketplace, meaning it wants to sell other brands on its website.

And even though it doesn't have skyrocketing growth as it used to, Sheen still sells a ton to U.S. consumers. And we shouldn't discount that. Today, the Singapore-based company priced its shares at more than 48 Hong Kong dollars apiece near the middle of the range it provided last week. That gives it a valuation of around 26 billion U.S. dollars, roughly a quarter of its valuation in 2022. And that's what's news for this Monday afternoon. Today's show was produced by Danny Lewis and Alexis Moore with supervising producer Tali Arbell.

I'm Pierre Bienn-A for The Wall Street Journal. We'll be back with the new show tomorrow morning. listening.