Earnings Season Peak Amid US-China Trade Dispute... Impact of Tariffs? [New York Stock Market Weekly Outlook]

Wall Street Not Relieved Despite Tariff Delay

Focus on Additional Remarks by President Trump

Keep an Eye on Tesla and Alphabet Earnings Announcements

U.S. President Donald Trump has entered the fourth week of market turmoil following the announcement of reciprocal tariffs by country. This week (April 28-May 2), the New York Stock Exchange is expected to be influenced by the progress of U.S.-China trade negotiations. Earnings announcements from major tech companies like Microsoft and Meta are also scheduled.

Last week, the three major indices in New York closed higher as President Trump calmed market turmoil following the tariff announcement. Although it is unclear whether the U.S. and China have actually started trade negotiations, the perception that the situation will not worsen for the time being has spread as the competitive tariff hikes between the two countries have stopped. However, there is also a rebuttal that the uncertainty remains as the market decline was so steep after the reciprocal tariff announcement that it was merely a 'dead cat bounce'.

The market is expected to focus on corporate earnings. This is because the impact of tariffs can be gauged from the earnings guidance of companies rather than the earnings themselves. This week is a concentrated period for earnings announcements, with over 180 companies in the S&P 500 set to announce their earnings. On the 30th, Microsoft, Meta, and Qualcomm will release their earnings, followed by Apple, Amazon, and Mastercard on the 1st of next month. According to FactSet, 76% of the S&P 500 companies that have announced earnings have exceeded Wall Street expectations, but the outlook for the second quarter and annual earnings is being revised downward. The expected earnings growth for the second quarter has fallen from 9.2% at the beginning of the first quarter to 6.6% now.

Key indicators that market participants place significant weight on will also be released. On the 30th, the preliminary U.S. economic growth rate for the first quarter and the March Personal Consumption Expenditures (PCE) price index will be announced, followed by the April non-farm employment figures and unemployment rate on the 2nd of next month. The U.S. Gross Domestic Product (GDP) for the first quarter is expected to rise by 0.4% quarter-on-quarter (annualized). This is a sharp decline compared to the final GDP growth rate of 2.4% in the fourth quarter of last year. The PCE price index is expected to have risen by 2.2% year-on-year in March. The February figure was a 2.5% increase.

Reporter Han Gyeong-je