Dive Brief:

• Optimism among CEOs at many of the largest U.S. corporations rose this quarter as they forecast higher sales and planned to boost capital expenditures during the next six months, the Business Roundtable said Wednesday.
• An index of CEO optimism rose nine points from last quarter to 89, exceeding its historic average of 83, the Business Roundtable found in a survey. The survey ended on March 6, after the Supreme Court struck down most Trump administration tariffs on Feb. 20 and the start of the Iran war on Feb. 28.
• “This quarter’s survey shows a notable improvement in CEO sentiment,” Business Roundtable CEO Joshua Bolten said. “The rise in the headline index [measuring CEO optimism] is encouraging, especially the solid gains in sales and capex, but the employment picture remains a concern, with as many CEOs planning to reduce employment as increase it.”

Dive Insight:

The brighter outlook among CEOs contrasts with a gloomier view among owners of small businesses.

Sentiment among small businesses last month fell short of forecasts, with a smaller percentage of business owners expecting higher sales during the coming quarter, the National Federation of Independent Business said Tuesday.

Reports of actual sales, however, hit the highest level since May 2022, and earnings trends also gained, the NFIB found in a survey. Forty six percent of U.S. workers are employed by a small business, according to the Small Business Administration.

Among the largest U.S. companies, plans for sales and capital spending rose six and 12 points, respectively, “despite global uncertainty,” Cisco CEO Chuck Robbins said in a statement.

The survey “results point to the impact of last year’s tax reforms, responsible deregulation and the resilience of the U.S. economy,” said Robbins, chair of the Business Roundtable.

Gross domestic product will grow at an annual rate of 2.1% this quarter, the Atlanta Fed forecast on March 6.

The “global uncertainty” flagged by Robbins has increased in recent weeks, with the Iran war propelling futures for Brent crude oil to nearly $120 per barrel on Monday.

The per-barrel price, while falling to $92 on Wednesday, is more than 13% higher than on Feb. 27 and the flare-up in fighting.

Surging oil prices have pushed up the cost of fuel for U.S. consumers. The average price for a gallon of regular gas has jumped 12% during the past week to $3.58 from $3.20, AAA said Wednesday.

Inflation held steady last month before U.S. and Israeli air strikes on Iran.

Consumer prices increased 2.4% in February on an annual basis, unchanged from January and in line with forecasts, according to data released by the Labor Department Wednesday.

So-called core prices, excluding volatile energy and food prices, rose 2.5% on an annual basis.

Inflation has exceeded the 2% long-run target of the Federal Reserve for five years.