The U.S. stock market is poised to move lower again this morning, as another volatile week on Wall Street begins. As we were writing this update, the S&P 500 Index futures were down about 65 points (-1.20%). The Dow and the NASDAQ were also showing signs of weakness. In the days ahead, investors will be paying close attention to President Trump’s tariff policies. The first-quarter earnings season will also be a major area of focus.
In economic news, later this morning The Conference Board will release its Leading Economic Indicators report for the month of March. This issuance, which attempts to forecast where the economy might be heading, is expected to show a slight monthly decline. It should be noted that some economists have expressed concerns about a potential economic slowdown this year. Over the next few days, several Federal Reserve Presidents will also be making presentations at various events, and these speeches can have an impact on the stock market. Also, on Wednesday, the Fed’s Beige Book report will be published, and investors will likely be looking carefully at this release. At this point, Wall Street seems to be hoping that the central bank will quickly cut interest rates to prop up the stock market. However, Chairman Jerome Powell does not seem to be in any rush, much to the upset of President Trump.
The first-quarter earnings season is in the process of unfolding. So far, the results have not been overly impressive. Fewer companies seem to be posting large upside earnings surprises, and their guidance on future prospects has often been quite reserved. It should be noted that many corporate leadership teams are probably adopting a conservative approach, given the uncertainty created by the President’s tariff agenda. This week, we will hear from numerous large corporations, including Alphabet (GOOG) and Tesla (TSLA). Needless to say, these two technology giants were once highly popular with investors, but have since fallen out of favor.
The stock market seems to have stalled out at this juncture, as traders look for some direction. For now, the S&P 500 Index has been holding above the low point (around 4,835) that was hit in early April. However, it remains to be seen if the market can remain above this key level for an extended period of time. It is also not clear what equity sectors might push the averages meaningfully higher, especially if the technology stocks no longer provide leadership. – Adam Rosner
At the time of this article’s writing, the author had a position in Alphabet (GOOG).
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