Small business sentiment is on the rise following a pause in new U.S. tariffs on China, according to Chase for Business’ latest Macroeconomic Sentiment Tracker. The May survey, conducted shortly after the May 12 tariff announcement, shows a rebound in confidence and a shift from uncertainty to action, with many owners raising prices, adjusting inventory, and reassessing their financial strategies.
75% of small business owners reported feeling optimistic about their businesses, up from 67% in April, while overall sentiment climbed to 68%, a four-point increase month-over-month. Financial needs are also shifting—52% of respondents now expect to need more working capital, up from 41% last month. Consultations with bankers also rose six points to 17%, with more owners planning to renegotiate payment terms and rates.
Tariffs remain a key concern, but clarity around their impact is prompting decisive moves. 44% of owners plan to raise prices to offset cost increases, while only 15% expect to absorb the costs, down four points from April. Expectations to draw down excess inventory jumped by 10 points to 43%, and 44% are now pausing planned investments, up seven points.
Despite pressure from inflation and supply chain concerns, sentiment about the economic environment improved, with 37% describing it as favorable to businesses, a six-point increase. Meanwhile, optimism around improving supply chains rose by five points to 28%.
Challenges persist—reduced profitability (34%), staffing issues (25%), and employee retention (20%) remain top concerns. However, signs of stabilization are emerging. Reports of difficulty paying bills fell four points, and fewer businesses cited low cash reserves.
The Chase for Business tracker, based on responses from 500 business owners generating between $50,000 and $20 million in revenue, reveals a cautiously optimistic sector. As businesses refine their response to evolving trade policies, sentiment appears to be stabilizing, even amid uncertainty.
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