The stock market remains at the mercy of tariffs.
Shifting narratives around policy from the Trump administration weighed on stocks as the water muddied following the 90-day pause on reciprocal tariffs announced on April 9.
Last week, the S&P 500 (^GSPC) fell about 1.5%, while the Nasdaq Composite (^IXIC) and Dow Jones Industrial Average (^DJI) each shed roughly 2.6% across four days of trading.
In the week ahead, President Trump’s policies will remain in focus while a slew of S&P 500 companies are expected to report quarterly results.
Results from Alphabet (GOOGL, GOOG), Tesla (TSLA), Chipotle (CMG), Boeing (BA), and Verizon (VZ) are set to lead a week in which quarterly reports from more than 120 S&P 500 companies are expected for release.
A quieter week on the economic data front is expected, with updates on activity in the manufacturing and services sectors, as well as consumer sentiment, headlining the calendar.
Trump’s policies remain at the forefront of the market narrative.
On Wednesday, markets sold off sharply as investors began to see the costs Trump’s tariffs will have for major companies and the challenges these policies may present for the broader US economic outlook.
Read more: What Trump’s tariffs mean for the economy and your wallet
The selling was kicked off by Nvidia (NVDA), which revealed late Tuesday night that new restrictions from the US government on its chip exports to China would result in $5.5 billion in charges.
The downside action only intensified when Federal Reserve Chair Jerome Powell said in a speech that the central bank would wait for “greater clarity” before considering any interest rate adjustments.
“What this comes down to is this continued level of uncertainty in the markets,” Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs, told Yahoo Finance.
In the near term, strategists aren’t confident the path ahead will become more clear. Citi’s head of US equity trading strategy, Stuart Kaiser, told Yahoo Finance that the next few weeks will be crucial for the market’s direction through the summer months.
“We need to see some good news on the tariff front, especially with our key trade partners,” Kaiser said.
“If you get that, I think the market will say, OK, this is a playbook for how this can evolve over the next three months,” he added. “If you don’t get that, I think the market’s going to have to really start to increase the recession odds on the view that these tariffs are going to be higher and longer implemented than they might have hoped.”
