The S&P 500 was thrilled with a three-day gaining streak, toasting to two consecutive winning days. Investors cheered when the Trump administration announced electronic products would be exempt from tariffs. The index jumped 0.79% on Monday, an impressive rebound in concert with the Nasdaq Composite, which gained 0.64%. All three of the big stock market averages finished up sharply in Monday’s session. Futures suggest a small drop for the Dow Jones Industrial Average.
Futures for the Dow were down 103 points, or 0.3%. This drop indicates an alteration in general market sentiment as investors continue to wait anxiously on key economic indicators and earnings reports. First up will be the New York Federal Reserve’s Empire State Manufacturing Survey, due out later today. It should provide a fascinating window into the new economic realities we face.
After all, this positive momentum in the tech sector was what drove the S&P 500’s incredible 69% rise in 2019. The business and investment community responded positively when investors learned that the administration would exempt key electronic products—like smartphones, computers, and semiconductors—from “reciprocal” tariffs. This latest development raised optimism among tech investors, who have been watching TPP news like hawks amid the ongoing U.S. shakeup of trade policy.
Despite the positive, analysts were quick to temper the optimism due to uncertainty surrounding the upcoming earnings release and its potential impact. Major players such as Bank of America, Citigroup, Johnson & Johnson, and PNC Financial are preparing to release their earning report. They’ll drop this data no later than Tuesday’s opening bell. Investors are still understandably nervous about how these companies will maneuver through the continued headwinds that are ongoing tariff policies.
Brenda Vingiello, chief investment officer of Sand Hill Global Advisors, shared her perspective on the earnings season:
“I think when it comes to earnings season, we’re just going to hear a lot of uncertainty with regard to some companies.” – Brenda Vingiello
A lot of firms had a great quarter. What the longterm impacts of tariffs will be is still unknown.
“I don’t think we’re going to have a lot of answers after this earning season other than that Q1 was probably pretty good.” – Brenda Vingiello
The trading climate would seem a confounding one as investors sort out good economic news against possible turbulence caused by tariff-related unknowns. Although the Dow rose 312.08 points, or 0.78% in Monday’s regular session, the index ran into headwinds in pre-market trading.
As companies prepare to unveil their financial results, market participants will be keenly assessing how recent tariff exemptions influence profitability and operational strategies. The macro economic picture will no doubt come into sharper focus as more data rolls out through the week.
Leave a Reply