Business
Third-quarter earnings are indicating a divided economy
A Taco Bell restaurant in El Cerrito, California, US, on Tuesday, April 29, 2025.
David Paul Morris | Bloomberg | Getty Images
With more consumer companies preparing to report third-quarter earnings this week, Wall Street will be watching for signs of a bifurcated or “K-shaped” economy as consumers diverge in their spending behaviors.
There have been increasing signals that wealthier Americans are spending more while lower-income Americans are significantly paring back their spending. Lower-income consumers have been hit hardest by rising inflation and escalating prices on essentials, with September’s consumer price index report indicating a 0.3% increase on the month, putting the annual inflation rate at 3%.
Shortly after the CPI report was released, the Federal Reserve on Wednesday approved its second straight interest rate cut, lowering its benchmark overnight borrowing rate to a range of 3.75% to 4%.
Meanwhile, the country is entering the fifth week of the government shutdown, with many federal workers going without pay.
The Census Bureau estimated there were 35.9 million people in poverty in 2024, the most recent available data, with the weighted average poverty threshold for a family of four coming in at $32,130. The median household income, meanwhile was $83,730 last year, according to the bureau.
The top 10% of households saw their income increase 4.2% between 2023 and 2024, but there was no meaningful change for the bottom 10% of households, the bureau said in September. There were approximately 33 million households in the top 10% of earners and another 33 million in the bottom 10% of earners as of last year.
Consumers with the highest purchasing power have benefited from stock market rallies and rising home values. Data from JPMorgan‘s Cost of Living Survey found that higher-income consumers reported stronger economic confidence readings for the next year.
Recent earnings reports from companies touching all corners of the economy have indicated the K-shaped trend is beginning to take hold. This week, companies like Yum Brands, McDonald’s, E.l.f. Beauty, Tapestry and Under Armour are preparing to release quarterly earnings reports and could report similar trends.
Last week, Chipotle reported it’s seeing consumers who make less than $100,000 a year, which represents roughly 40% of the company’s customer base, spending less frequently due to concerns about the economy and inflation. CEO Scott Boatwright said the company is seeing “consistent macroeconomic pressures” with a 0.8% decline in traffic for the quarter.
Coca-Cola said in its third-quarter earnings that pricier products like Topo Chico sparkling water and Fairlife protein shakes are driving its growth. Procter & Gamble reported similar results, saying wealthier customers are buying more from club retailers, which sell bigger pack sizes, while lower-income shoppers are significantly pulling back.
And some of the companies reporting this week have already indicated they may be seeing similar behaviors. In early September, McDonald’s CEO Chris Kempczinski told CNBC’s “Squawk Box” that the chain’s expansion of its value menu was due to a “two-tier economy.”
“Traffic for lower-income consumers is down double digits, and it’s because people are either choosing to skip a meal … or they’re choosing to just eat at home,” he said.
The trend isn’t limited to just food and beverage, either. In the autos world, consumers who can afford to buy new vehicles are on a spree, while those who are more price constrained are sitting out. Defaults and repossessions are on the rise while the average price for a new vehicle is setting records.
And in the service industry, Hilton earlier this month reported that it saw a drop in revenue for its affordable brands while its luxury offerings performed exceedingly well. Still, CEO Christopher Nassetta told CNBC last month that he doesn’t expect bifurcation to last much longer.
“My own belief is that as we look into the fourth quarter and particularly into next year, we’re going to see a very big shift in those dynamics, meaning, I don’t think you’re going to continue to have this bifurcation,” Nassetta said. “That’s not to say I think the high end is going to get worse or bad. I just think the middle and the low end [are] going to move up.”
Correction: This article has been updated to correct the month of the CPI report.
Mumbai: Hyundai Motor India Limited on Monday reported a solid performance in the third quarter (Q3) of FY26, with its consolidated net profit rising 6.3 per cent year-on-year to Rs 1,234.4 crore. The growth was supported by steady demand in the domestic market, strong export numbers and higher sales during the festive season, the company said in its stock exchange filing.
Revenue from operations during the quarter increased 8 percent compared to last year to Rs 17,973.5 crore. Operating performance also improved, with EBITDA rising 7.6 percent year-on-year to Rs 2,018.3 crore. The EBITDA margin stood at 11.2 percent, remaining broadly stable compared to the same period last financial year.
The company said domestic demand during the quarter benefited from GST 2.0-related advantages and festive-season momentum.
Wholesale volumes rose 5 per cent sequentially, supported by strong retail sales across key models.
Exports played an important role in overall growth, with export volumes jumping 21 per cent year-on-year in the December quarter.
Exports contributed around 25 per cent to Hyundai Motor India’s total sales during the period.
On the product front, the Creta once again emerged as a key growth driver. The SUV reclaimed its position as India’s best-selling SUV and achieved its highest-ever annual sales of more than 2 lakh units in calendar year 2025.
The newly launched Venue also saw healthy demand, with nearly 80,000 bookings so far. The company said first-time buyers accounted for 48 per cent of the total bookings for the model.
For the nine months ended December 31, 2025, Hyundai Motor India reported EBITDA of Rs 6,632.5 crore, marking a year-on-year growth of 3.3 per cent.
EBITDA margins expanded to 12.8 per cent despite higher costs related to capacity stabilisation and commodity prices. Net profit for the nine-month period rose to Rs 4,175.9 crore.
Commenting on the results, Managing Director and CEO Tarun Garg said the company delivered healthy growth in volumes, revenue and profitability during the quarter.
He added that an improved sales mix and disciplined cost management helped support margins on a year-to-date basis.
Garg also highlighted strong sales in January 2026 as a positive sign for the rest of the financial year.
Indian industry has welcomed lower tariffs, but experts caution against celebration until details are clearer.
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MCX Silver Jumps 6% To Hit Upper Circuit After 46% Crash; Can India–US Deal Spark A Sustained Rally?
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Silver prices staged a sharp rebound on Tuesday after an intense phase of liquidation that followed the abrupt unwinding of a record-setting rally
Silver Rates Surge Today
Silver Rates Today: Silver prices staged a sharp rebound on Tuesday after an intense phase of liquidation that followed the abrupt unwinding of a record-setting rally. The earlier sell-off had pulled prices down more than 46% from their peak in just three sessions, highlighting the extreme volatility in the precious metals space. Gold prices also recovered alongside silver.
On the MCX, silver hit the 6% upper circuit at Rs 2,50,436 per kg on February 3, while MCX gold climbed 3% to Rs 1,48,310 per 10 grams.
A key macro catalyst emerged after US President Donald Trump announced a trade agreement with India. The deal lowers US tariffs on Indian goods to 18% from 50% in exchange for India halting Russian oil purchases and easing certain trade barriers. The development added a fresh geopolitical layer to already jittery commodity markets.
Gold mirrored silver’s recovery in global trade. Spot gold rose as much as 4.2% to move above $4,855 an ounce after sliding 4.8% in the previous session. That decline had extended Friday’s slump, the steepest in over a decade.
Earlier, on January 30, spot gold had tumbled nearly 10% in its sharpest single-day fall since 1983, dragging prices back below the $5,000-an-ounce mark that had been crossed only days before and erasing a sizable portion of the year’s gains.
The rebound extended beyond gold and silver. Spot platinum advanced 3% to $2,183.64 an ounce after touching a record $2,918.80 on January 26, while palladium rose 2.7% to $1,765.75, joining the broader recovery across precious metals.
What drove the rebound after the crash?
Domestic sentiment got a lift from the India–US trade deal, while investors also reassessed geopolitical risks, currency movements and the outlook for US monetary leadership. Strong buying from Chinese retail investors ahead of the Lunar New Year further supported demand, although China’s markets are set to shut for over a week from February 16, temporarily sidelining a key source of consumption.
Traders are also watching developments involving Iran after Trump signalled that talks on a potential new nuclear agreement could begin soon. Any diplomatic progress could reduce gold’s safe-haven appeal and cap gains.
The earlier sell-off in bullion was initially triggered by Trump’s nomination of Kevin Warsh as the next Federal Reserve chair, which strengthened the US dollar and pressured metals. The slide intensified after CME Group raised margin requirements for precious metals futures, forcing leveraged traders to unwind positions quickly. A stronger dollar combined with higher trading costs led to a sharp liquidity squeeze, accelerating the fall.
Will the rally sustain?
Hareesh V, Head of Commodity Research at Geojit Investments, said longer-term drivers such as geopolitical tensions, central bank buying and macro uncertainty remain supportive for precious metals.
He noted that the previous correction was magnified by extremely overbought conditions after gold and silver had surged to record highs, with silver rallying more than 60% in a month and gold over 20%. Profit-booking snowballed into panic selling as liquidity thinned and volatility spiked.
“The violent drop was more of a technical correction than a deterioration in core fundamentals,” he said, suggesting that the broader structural support for the metals remains intact.
February 03, 2026, 11:07 IST
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