24 April 2025

US equities closed higher on Friday, marking a fourth consecutive session of gains, fueled by strength in Big Tech, while President Trump’s latest tariff remarks kept trade tensions in the spotlight. The S&P 500 rose 0.7%, the Nasdaq gained 1.1%, and the Dow added 20 points. Wall Street posted solid weekly gains, with the S&P 500 up 4%, the Nasdaq rising 6%, the Dow adding 2%. The second strongest week for 2025 and the S&P 500 is now just 3% below its levels prior to the release of the Trump tariffs – hard to believe. 

Trump’s suggestion of 50% tariffs as a “total victory” added uncertainty, while Beijing disputed claims of ongoing talks, offsetting optimism from China’s decision to exempt some US goods from tariffs.  

Alphabet shares climbed 1.5% after beating earnings estimates, announcing its first-ever dividend, and revealing a $70 billion stock buyback plan. Tesla surged 9.8% after new self-driving car rules were unveiled. Intel fell 7% on weak guidance, and T-Mobile dropped 11% on soft subscriber growth.  

This week, Amazon, Apple, and Meta—fellow members of the “Magnificent Seven”—are set to report earnings.  

Inclined to sit-out the turn-around trade? You wouldn’t be alone. The head of research at value-investing firm Boston Partners found himself checking and re-checking economic data that he fears show early signs of the damage already caused by Donald Trump’s trade war. Signals like dwindling Los Angeles shipping volumes, declining tourism-related travel and shrinking credit-card receipts in key consumer sectors. 

Similarly, at Apollo Global Management Inc., chief economist Torsten Slok flagged a “collapsing” number of container vessels departing China for the United States, writing in a note that consumers will soon see higher inflation and significant layoffs in trucking, logistics and retail jobs. At JPMorgan Chase & Co., chief US economist Michael Feroli is looking at high-frequency data already showing a drop in international visitors, which he warns would put pressure on economic growth. 

Related to the above, strategists from both JP Morgan and Morgan Stanley described this week’s trade in both equities and bonds as reflecting an investor complacency. Both houses have a 60% recession projection, and on that basis any turn-around could be a fool’s rally. Irrespective of specific economic forecasts, what we do know is that the off-the-cliff soft data will progressively feed through to the hard data. And we are already seeing early signs of that, some of which were noted above. 

This week’s quarterly results from Microsoft Corp., Apple Inc., Meta Platforms Inc. and Amazon.com Inc will land in a market obsessed with every twist of a trade war. Even with all the uncertainty, Wall Street isn’t giving the companies’ estimates much wiggle room. Analysts expect the Magnificent Seven to deliver an average of 15% profit growth in 2025, a forecast that’s barely budged since the start of March despite the flareup in trade tensions. That raises the stakes for the four megacaps reporting this week, which collectively have a nearly 20% weighting in the S&P 500. Traders are unlikely to forgive earnings shortfalls in an already fearful market climate, despite steep declines in the stocks’ share prices and improved valuations. Dire outlooks from the industry behemoths would also be poorly received, especially if they bolster fears of muted corporate spending ahead.