The upcoming week will be a key test for the US stock market’s rebound, as investors watch major earnings reports from Apple and Microsoft, while global trade developments could add to market volatility.
According to news agency Reuters, next week’s significant economic indicators include the US jobs data, first-quarter economic growth figures and inflation updates.
These reports will help investors determine whether recent market strength indicates recovery from tariff-related declines.
This week’s equity market improvements were influenced by signs of softening in the Trump administration’s trade position, particularly regarding China. However, the situation remains uncertain, and new tariff developments could potentially reverse market gains.
“There seems to be some potential for compromise on the tariff situation,” which has supported the recent rally, said Michael Mullaney, director of global markets research at Boston Partners, Reuters reported.
But stocks will remain sensitive to “the news flow that day,” Mullaney said, further adding that, “If it’s positive on tariffs, the market goes up. If it’s negative on tariffs, the market goes down.”
Investors anticipate continued uncertainty regarding trade matters after President Trump postponed significant import tariffs on various nations until July. This decision followed substantial market volatility triggered by his April 2 announcement of extensive levies.
Current earnings reports from S&P 500 companies exceed expectations. First-quarter profits show a 9.7% increase compared to the previous year, surpassing the April 1 projection of 8%, according to LSEG IBES.
Several companies have indicated future challenges. Procter & Gamble, PepsiCo, and Thermo Fisher have reduced their annual profit forecasts.
The impact of new trade policies on economic indicators remains under scrutiny, with widespread concerns about increased prices and reduced growth rates.
Upcoming economic data releases include the first-quarter GDP figures and the March personal consumption expenditures (PCE) price index, a key measure of inflation.
The May 2 US employment report could significantly influence market direction.