Over the past week, the U.S. stock market experienced a strong rebound as President Trump's remarks eased investors' concerns about an escalation in the U.S.-China trade war and the Fed's independence being compromised. The S&P 500 rose by 4.5%, the Dow Jones Industrial Average increased by 2.5%, and the tech-heavy Nasdaq Composite Index stood out with a gain of 6.6%. After the major indices largely recaptured ground lost since the April 2 tariff announcement, the market is about to face a week full of economic data and corporate earnings reports.
In terms of economic data, the market will focus on the U.S. GDP growth rate and inflation data for the first quarter, especially before the April non-farm payrolls report released at 20:30 on Friday. Economic data will provide further guidance for the market.
On the corporate front, 180 companies in the S&P 500 index will release their quarterly reports, with tech giants like Apple, Amazon, Coca-Cola, and Microsoft garnering widespread attention. As these reports are released, investors will focus on how changes in the tariff environment and the fierce competition in the AI sector impact company prospects.
One of the main driving factors behind last week's stock market surge was the two major easing signals from the Trump administration. Last Tuesday, Trump told reporters that he had "no intention" of firing Fed Chairman Powell, reversing previous market expectations that led to a nearly thousand-point drop in the Dow in one day. Simultaneously, Trump hinted at a reduction in tariffs on Chinese goods, stating that the rates would be "significantly lowered." This statement enabled the S&P 500 to achieve its first four-day rally since January, boosting market sentiment.
Nonetheless, Michael Kantrowitz, chief investment strategist at Piper Sandler, pointed out that while the crisis is not fully averted, historical experience indicates that the market often stabilizes gradually when core issues begin to ease. However, strategists believe the cloud of tariff issues has not completely dissipated, so the market needs to remain vigilant.
The market's tariff concerns primarily stem from fears of a sudden halt in the U.S. economy. Economists predict that the annualized growth rate of U.S. GDP for the first quarter will plummet to 0.1%, marking the slowest quarterly growth since 2022. Meanwhile, the Fed’s preferred inflation indicator, the core Personal Consumption Expenditures (PCE) Price Index, is also closely watched. The March core PCE is expected to have an annual increase of 2.5%, with a month-on-month growth of 0.1%.
Despite signs of economic slowdown gradually emerging, the labor market remains strong. Economists expect the April non-farm employment report to add 133,000 new jobs, with the unemployment rate holding steady at 4.2%. Nevertheless, Wells Fargo's economic research team stated that despite changes in trade policy, the labor market remains stable.
Recently, tech stocks have been the driving force behind the market's rise. Tesla's stock price increased by about 18%, benefiting from Musk's reduced government responsibilities and optimistic autonomous driving regulations. Meanwhile, stocks of tech giants like Nvidia, Amazon, and Meta rose by around 9%. Google's positive earnings report also boosted its stock price.
Despite this, the year-to-date chart reminds investors that U.S. stocks still face significant downside risks in 2025. With the upcoming earnings reports of Apple, Amazon, Meta, and Microsoft, investors will closely examine how the tariff environment and competition in the AI field reshape the development prospects of each company. These reports are expected to be crucial in determining whether the market can continue its rebound.
