On Monday, the S&P 500 index closed nearly unchanged, experiencing volatile trading as investors focused on upcoming crucial economic data releases and quarterly earnings from several major companies. The S&P 500 rose by a mere 0.06%, closing at 5528.75 points, extending its five-day winning streak, marking the longest rally since last November. However, the performance of mega-cap tech stocks weighed on the market, with Nvidia dropping 2.1% and Amazon slipping 0.7%, contributing to the weakness in the S&P 500 and resulting in a decline for the Nasdaq Composite.
In the tech sector, Amazon, Apple, Meta Platforms, and Microsoft are set to release their earnings reports this week. Despite the weak performances from Amazon and Nvidia, Apple rose 0.4% and Meta increased by 0.5%, helping offset the drag from other stocks.
This week, about 180 S&P 500 component companies are scheduled to release earnings reports, and investors are particularly focused on the potential impact of President Trump's new tariff policies on corporate profits. Jack Ablin, Chief Investment Officer at Cresset Capital, stated, "This is earnings week, especially with four of the major tech giants reporting. Hearing from CEOs on their forward guidance against the backdrop of a potential trade war will be the highlight to watch."
Additionally, although the first-quarter earnings of S&P 500 companies are expected to grow by 10.9% year-over-year, many companies have warned of uncertainties arising from U.S. trade policy, with some even withdrawing their earnings forecasts. According to data from the London Stock Exchange Group (LSEG), among the 179 companies that have reported, 78 issued negative earnings guidance, while only 32 provided positive guidance, resulting in a negative-to-positive guidance ratio of 2.4, slightly lower than 2.6 from the same period last year.
Apart from earnings reports, investors will closely monitor a range of economic data, including the Personal Consumption Expenditures Price Index (CPI), labor market data, and the upcoming U.S. monthly employment report.
In individual stocks, Boeing's shares rose by 2.4%, helping the Dow Jones Industrial Average maintain its upward trend. This came after Bernstein raised its rating and price target on Boeing's stock.
Despite the recent steady rebound, fueled by optimism over U.S. agreements with trade partners, the S&P 500 index remains about 10% below its record high in February. Investors are closely monitoring the impact of tariff policies, particularly whether the global economy might face recession risks due to tariff barriers.
