For more business and finance explainers, check out our Yahoo U page.

Several American companies are again readying their recession playbooks as rapid inflation and geopolitical factors raise the risk of another economic downturn.

The Conference Board’s measure of CEO “confidence” showed a sharp decline in optimism over the economic outlook in the second quarter of 2022, falling to levels not seen since the beginning of the pandemic.

Executives across industries have painted bleak pictures on future earnings. In the market for tools, Stanley Black & Decker (SWK) said on May 26 it is doing “scenario planning” to evaluate the impact of a 5 to 10% drop in volume. In the gaming space, Take-Two Interactive (TTWO) warned on May 16 that “the entertainment business will be affected by an overall economic slowdown.”

The culprits behind this gloomy sentiment? It’s all macroeconomic: COVID-related shutdowns in China, disruptions linked to the Russian invasion of Ukraine, and the contraction in easy-money policies from the Federal Reserve.

This current cocktail of macroeconomic concerns has pushed companies to lower guidance, and investors have responded by dumping stocks.

For investors, the concern isn't just how profitable a company is in the current quarter, but how profitable they will be in the future.

So: how do these factors specifically affect the business outlook?

Companies with a large presence in overseas markets saw a massive disruption from the Russian invasion of Ukraine. A war in eastern Europe not only disrupted the supply chain for metals and grains, but raised the price of oil and gas as well. In China, a zero-COVID policy led to shutdowns across large portions of the world’s second largest economy.

Cosmetics company e.l.f. Beauty (ELF) and speaker manufacturer Sonos (SONO) are among the many companies with portions of their supply chains in China, and cited the shutdowns as a major challenge in their recent quarterly results. Both geopolitical issues have also broadly raised materials and shipping costs, which increases expenses for companies.

Uncertainty over the timing of a resolution in eastern Europe or new surges in COVID have pushed companies to lower their forecasts regarding margins for the quarters ahead.

“Our outlook assumes an estimated impact of approximately $500 million relating to Russia and China COVID lockdowns,” chip designer Nvidia said on its earnings call held May 25. The company reported $8.3 billion in revenue in the first quarter of the year.

Inflation remains the big story for the U.S. economic outlook, with prices increasing at paces unseen since the 1980s.

The concern for corporates is that inflation will erode the purchasing power of U.S. consumers if it outpaces wage increases for an extended period of time, potentially cutting off spending growth and economic activity.

For now, Americans continue to spend at high levels, which has in part enabled companies to juice earnings through the pandemic recovery.

But the Federal Reserve, the steward of the U.S. economy, has made it clear it needs to ratchet borrowing costs higher to quell the demand. The Fed began raising rates earlier in the year — which lifted mortgage rates and other borrowing rates — and has made it clear that further increases will be coming.

This new rate environment could end the current period of high margins, and the severity of any margin contraction will depend on how well the Fed can manage a so-called "soft landing," or slow the economy without triggering a recession.

Fed Chairman Jay Powell said May 4 that “we have a good chance to have a soft or softish landing.”

Companies certainly hope so as well.

"We have lived through some really tough times," industrial supplies company DXP Enterprises (DXPE) said on May 10. "And we all hope that our Federal Reserve gets this right in balancing [a] soft landing."

Read and watch more of Yahoo U here

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

Steve McCraw, of the Texas Rangers, said police made "the wrong decision" at Robb Elementary School, where 19 children and two teachers were killed.

Ian Rogers, 46, of Napa faces up to nine years in federal prison after conspiring to attack Democratic targets following Donald Trump's 2020 loss.

(Bloomberg) -- House Republican Leader Kevin McCarthy is resisting compliance with a subpoena to testify before the congressional panel investigating the Jan. 6, 2021, insurrection at the Capitol -- questioning its legal authority to even issue subpoenas.Most Read from BloombergFord Beats Tesla to the Punch With First Electric F-150 DeliveryStocks Notch Their Best Week Since November 2020: Markets WrapRussian Wins in Eastern Ukraine Spark Debate Over Course of WarUkraine Latest: US Slams Putin’s

Less than a week before its scheduled date, the Communications Workers of America have decided to withdraw a formal vote on unionization for Apple Store employees at Atlanta's Cumberland Mall location.

An intense news conference Friday included acknowledgments from authorities that police were too slow to confront the Uvalde, Texas, gunman.

‘We’ve got to move or we’ll die’: Tory MP’s son on front line Vladimir Putin’s forces are running out of tanks Germany ‘watering down’ EU embargo on Russian oil Russians helping Ukrainians to flee from enemy hands Listen to the latest episode of our daily Ukraine podcast

Speakers at the National Rifle Association annual meeting assailed a Chicago gun ban that doesn't exist, ignored security upgrades at the Texas school where children were slaughtered and roundly distorted national gun and crime statistics as they pushed back against any tightening of gun laws. THE FACTS: Chicago hasn’t had a ban on handguns for over a decade. Big supporters of the NRA, like Cruz, may well know this, given that it was the NRA that sued Chicago over its old handgun ban and argued the case before the U.S. Supreme Court, which ruled the ban unconstitutional in 2010.

Texas governor backs out of in-person appearance as protesters descend on gun-rights group’s event

In this photo provided by the New Mexico National Guard, a New Mexico National Guard truck is ready to deliver potable water to communities in response to the Calf Canyon/Hermits Peak fire in northern New Mexico on Sunday, May 1, 2022. Thousands of firefighters battled destructive wildfires in the Southwest as more residents prepared to evacuate in northern New Mexico where strong winds and dangerously dry conditions have made the blazes hard to contain. (New Mexico National Guard via AP) The re

While the patch seen in social media posts is legitimate, the assertion that it ties to a World Economic Forum police force is not.

A California man pleaded guilty Friday to plotting to blow up the state Democratic Party’s headquarters in what prosecutors said was the first in a planned series of politically-motivated attacks after the defeat of former President Donald Trump. Ian Benjamin Rogers, 46, of Napa, pleaded guilty to conspiring to destroy a building by fire or explosives, possessing an explosive device and possessing a machine gun under a plea agreement that could bring him seven to nine years in federal prison. U.S. prosecutors in San Francisco charged Rogers and Jarrod Copeland with conspiring to attack targets they associated with Democrats after Trump's defeat in the November 2020 presidential election.

Students in at least 34 states and Washington, D.C., walked out of their classes Thursday in protest over the Uvalde, Texas, school shooting.

The police official blamed for not sending officers in more quickly to stop the Uvalde, Texas, school shooting is the chief of the school system's small police force, a unit dedicated ordinarily to building relationships with students and responding to the occasional fight. Preparing for mass shootings is a small part of what school police officers do, but local experts say the preparation for officers assigned to schools in Texas — including mandatory active shooter training — provides them with as solid a foundation as any. “The tactical, conceptual mindset is definitely there in Texas,” said Joe McKenna, deputy superintendent for the Comal school district in Texas and a former assistant director at the state's school safety center.

Most parties are being held on 5 June during the ‘Big Jubilee Lunch’

More than a million Americans have died of Covid, leaving 213,000 children bereft of at least one primary caregiver. Photographer Callaghan O’Hare visits two families now missing a parent and meets the children whose lives are permanently scarred by the pandemic

Having not driven a BMW for a little while, I was relieved to see that the traditional BMW virtues haven’t been overlooked, writes Sean O'Grady

A mother in Indiana believes eight people killed at a FedEx facility would still be alive if prosecutors had prevented her son from buying more guns.

(Bloomberg) -- Former President Donald Trump rejected tighter gun control after a Texas school shooter killed 19 children and two teachers, telling a National Rifle Association meeting that solutions include mental-health care and training teachers to carry concealed weapons. Most Read from BloombergFord Beats Tesla to the Punch With First Electric F-150 DeliveryStocks Notch Their Best Week Since November 2020: Markets WrapRussian Wins in Eastern Ukraine Spark Debate Over Course of WarUkraine La

Attorneys for the families who lost relatives in last year's collapse of a Florida condominium tower that killed 98 people reached a $1.02 billion settlement Friday, providing a speedy resolution to lawsuits that could have dragged on for years. The agreement to end litigation over the Champlain Towers South tragedy awaits approval by Circuit Judge Michael Hanzman, but that should just be a formality. Lawyers previously had announced in court a tentative agreement that almost $1 billion would be split by the families whose relatives died or were harmed in the collapse of the 12-story tower in Surfside, and parties on both sides of the lawsuit filed a motion Friday committing to a $1.02 billion settlement fund.

(Bloomberg) -- The labor group trying to organize Apple Inc. employees at an Atlanta store is withdrawing its request for an election, citing what it alleges are illegal union-busting tactics by the company.Most Read from BloombergFord Beats Tesla to the Punch With First Electric F-150 DeliveryStocks Notch Their Best Week Since November 2020: Markets WrapRussian Wins in Eastern Ukraine Spark Debate Over Course of WarUkraine Latest: US Slams Putin’s Food-for-Sanctions Relief PlanZilingo’s Fired C