Good morning. Greg McKenna filling in for Sheryl. Last week, I spent a lot of time at the Bloomberg Invest summit listening to business leaders like Carlyle CEO Harvey Schwartz and Blackstone COO Jonathan Gray respond to questions about markets plunging amid President Donald Trump’s on-again, off-again tariff threats, particularly with Mexico and Canada.
The sell-off has continued this week. At Tuesday’s close, the S&P 500 finished down 9.3% from the index’s all-time high in mid-February, while the Nasdaq Composite has fallen 13% in that span. Wall Street considers a 10% drop to be correction territory.
Schwartz and Gray didn’t sound the panic button last week. From their perspective, while tariff uncertainty may raise the risk profile of certain companies, it can also make good businesses available at a discount. Amid the short-term upheaval, they’re ultimately judged on long-term performance.
Still, Soros Fund Management CEO Dawn Fitzpatrick didn’t mince words about the challenges many companies and individuals face. She also acknowledged the argument of Treasury Secretary Scott Bessent, who formerly held her other role of CIO at Soros, that many U.S. manufacturers will be able to absorb price increases from tariffs.
Out of 192 CFOs and finance leaders recently polled by Gartner, 59% said their cost base would absorb little to none of the increased price pressures from tariffs. About 30% said nearly all of those costs would be passed on to consumers, while another 29% said the cost pass-through would be limited to 10% or less.
“But I think what you can’t control is consumer confidence and corporate confidence,” Fitzpatrick said at the conference hosted by Bloomberg, “and I think that is what is falling off a cliff right now.”
One big worry is that businesses will decide to delay investment as the saga continues.
“We’ve not seen this level of tariffs, at least in modern times,” said Raymond J. Maguire, president of investment bank Lazard. “We’ve seen it historically, the implications of which historically have been pretty dramatic.”
He was likely referencing the Smott-Hawley tariffs of 1930. As Sam Stovall, chief investment strategist at CFRA Research, told me after Monday’s bloodbath for stocks, those measures placed trade barriers around the world and greatly exacerbated the Great Depression.
“Nobody really expects that,” he said. “Certainly nobody wants that, but it’s something that people fear.”
Regardless, investors continue to brace for impact. Goldman Sachs’ chief economist revealed Tuesday the firm had downgraded expectations for American GDP growth in 2025, with the investment bank’s forecast moving below Wall Street’s consensus for the first time in 2½ years.
At the conference last week, Brookfield CEO Bruce Flatt got the last word. Flatt, who leads the world’s second-largest alternative asset manager, was asked what he would tell those in the audience feeling uneasy as the state of the global economy seems to shift by the hour.
“Stay focused on the long ball,” said Flatt, who some have dubbed Canada’s Warren Buffett. “Nothing else matters.”
That might be easier said than done.
Greg McKenna
greg.mckenna@fortune.com
Leaderboard
Jeff Scissons was promoted to CFO of ALLETE, Inc. (NYSE: ALE), an energy company. He succeeds Steven W. Morris, who recently announced his plan to retire in July. Scissons joined the company in 2013 and was promoted to ALLETE VP and corporate treasurer in 2024 after serving in key strategic roles throughout his tenure. He currently leads the transition committee for the acquisition of ALLETE by the Canada Pension Plan Investments Board and Global Infrastructure Fund.
Marya Burgio Wlos was named EVP and CFO of Community Financial System, Inc. (NYSE: CBU) and Community Bank, N.A., effective March 31. Joseph E. Sutaris, who previously announced his retirement as EVP and CFO, will remain with the company and bank through July 1. Wlos has served as managing director and COO of the Investment Bank at M&T Bank since January 2021. She previously served as head of management accounting and finance at M&T Bank and as head of trading relationship management of UBS Asset Management at UBS AG.
Big Deal
The Institute of Internal Auditors has released its 2025 Pulse of Internal Audit research which explores the most notable trends within the profession. The report offers original insights and statistics sourced from chief audit executives across the U.S.
Key topics include:
—How the scope of internal audit responsibilities is expanding to areas such as fraud, ethics, and Sarbanes-Oxley (SOX).
—The growth of internal audit staff and budget, hitting near-pre-COVID levels.
—The rise in generative AI adoption by internal audit functions for tasks such as audit planning and reporting.
Going deeper
“Financial performance may have been flat but some CEO payouts are soaring as bonuses roar back” is a new article by Fortune’s Amanda Gerut. There’s a stark disconnect between corporate financial performance and compensation for chief executives among a broad sample of 50 publicly traded companies with revenues over $1 billion, a new analysis shared with Fortune revealed.
Overheard
“Desire at scale: I want to ensure that this is injected in our marketing philosophy.”
—Unilever CEO Fernando Fernandez told Barclays analyst Warren Ackerman in a fireside chat last week, marking his first interview detailing his strategy as chief executive, Fortune reported.