Earnings Reports, Trade Tensions, and Economic Data Shape Investor Sentiment

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Index Update

U.S. stock futures declined as investors prepared for a packed week of first-quarter earnings reports, with over 180 S&P 500 companies, including major tech names like Apple, Amazon, Meta, and Microsoft, set to announce results. Although first-quarter earnings have been generally strong, many companies are lowering forecasts for the second quarter and full year amid rising global trade tensions. Uncertainty persists over the status of U.S.-China trade talks, though President Trump has recently softened his stance and China has exempted some U.S. goods from tariffs. Despite earlier trade-related volatility, major indexes posted strong gains last week, with the Dow, S&P 500, and Nasdaq all rebounding sharply.

Market Movers

On Friday, the top gainers were Pony AI Inc (+23.25%), followed by Cantor Equity Partners, Inc (+17.90%). On the contrary  Saia, Inc (-24.62%) and SS&C Technologies Holdings, Inc (-8.95%) declined the most the same day.

Commodities Update

WTI and Brent crude oil futures held steady below $63 and $67 per barrel, respectively, as traders assessed the latest developments in the U.S.-China trade dispute. Although President Trump softened his rhetoric and China exempted some U.S. imports from heavy tariffs, concerns over a potential global supply glut capped price gains. Bearish sentiment was reinforced by progress in U.S.-Iran nuclear talks, raising the possibility of increased Iranian oil exports if sanctions are eased, and the potential for OPEC+ to boost production for a second consecutive month. Separately, senior U.S. officials pushed for progress in Russia-Ukraine peace talks following a meeting between Trump and Ukrainian President Zelensky.

Meanwhile, gold prices dropped over 1% to around $3,280 per ounce as easing trade tensions weakened demand for the safe-haven asset. Hopes for improved U.S.-China relations, combined with a stronger U.S. dollar, pressured bullion prices lower. Market participants are now turning their attention to key upcoming U.S. economic data releases, including the first estimate of Q1 GDP, March PCE inflation figures, and April employment data, which could influence expectations around the Federal Reserve’s next policy decisions.

Macro Update

The U.S. 10-year Treasury yield held steady around 4.24% as investors awaited key economic reports, including April jobs data, first-quarter GDP, and the PCE inflation gauge, which could influence expectations for Federal Reserve rate cuts. Markets are currently pricing in a 25-basis-point cut in June and anticipating three cuts by year-end. Sentiment was also supported by signs of easing U.S.-China trade tensions and President Trump’s decision to back off threats against Fed Chair Jerome Powell, helping stabilize confidence in U.S. assets.

Futures Update

U.S. stock futures dipped as investors focused on an important week of corporate earnings amid ongoing tariff tensions. The Dow, S&P 500, and Nasdaq 100 futures all posted small declines. Sentiment was further weighed down by uncertainty after U.S. Treasury Secretary Scott Bessent did not support President Donald Trump’s claim that trade talks with China were underway. Meanwhile, Airbus finalized a deal to acquire certain assets from Spirit AeroSystems, and gold prices slipped as hopes for easing trade disputes reduced safe-haven demand

After a lackluster start to the session, stocks experienced significant volatility during Friday’s trading. All major indices closed close to their daily highs, with the S&P 500 gaining 40.44 points, or 0.74%, to end at 5525.22. From a technical standpoint, the index is hovering around its 50-period EMA, suggesting that it may experience volatility in the short term. This indicates a potential phase of consolidation before a clear directional trend emerges. Additionally, the 14-period Relative Strength Index (RSI) is currently at the midpoint, signaling that we might see sideways momentum in the near future. Key support is identified at 5335, while resistance is noted at 5712.