Morning Business Report: Strong profits, rising food costs, and market volatility

Despite ongoing tariffs and trade uncertainty, U.S. company profits remain strong as earnings season continues.

(LILAMAX)- Despite ongoing tariffs and trade uncertainty, U.S. company profits remain strong as earnings season continues. With roughly one-third of companies in the S&P 500 having reported quarterly results so far, the average net profit margin stands at 13.2%, according to FactSet. Senior earnings analyst John Butters says that figure would mark the highest profit margin on record dating back to 2009. Analysts attribute the strong earnings in part to aggressive investment in artificial intelligence technology and the impact of corporate tax cuts passed in 2025.

While profits are climbing, consumers are still feeling pressure at the grocery store. Grocery prices rose about 2.4% in December compared to a year earlier, weighing on household budgets even as overall inflation held relatively steady. Several Super Bowl party staples saw price increases over the past year, including meat, poultry, fish, eggs, fruits, vegetables, alcohol, and soft drinks. According to the National Retail Federation, total Super Bowl food spending could rise about 9% this year compared to last.

On Wall Street, the S&P 500 fell for a third straight session, extending a short-term losing streak. Even so, stocks managed to post a gain for January overall, despite heightened volatility tied to earnings reports and trade-related headlines.

In Washington, Treasury Secretary Scott Bessent is reportedly seeking to recruit a new “top cop” to oversee nonprofit organizations. According to reporting by the New York Post, Bessent wants to appoint a senior official within the U.S. Department of the Treasury to closely scrutinize charities that may be using tax-exempt status to engage in excessive political activity, lobbying, or potential fraud. The move follows growing concerns that some nonprofits have been funneling so-called dark money into questionable political efforts while enjoying tax-free benefits.

Meanwhile, a new survey highlights just how far Americans are willing to go for their pets. Research conducted by Talker Research for MetLife Pet Insurance found that 65% of pet owners would cut back on their own lifestyle expenses before reducing spending on their pets. The annual survey also found that 85% of respondents said their pet was their main source of happiness throughout 2025. Pet owners reported splurging the most on high-quality food, new toys, and grooming.