Wall Street is heading into one of its most closely watched weeks of the year, with a packed schedule of earnings reports and economic indicators that could test the durability of the recent rally. Reports on GDP, inflation, and employment will coincide with quarterly results from more than 180 S&P 500 companies, including Apple, Amazon, Meta, and Microsoft.
Market Momentum Builds on Stabilised Policy Signals
Major indexes surged last week, with the S&P 500 climbing 4.5%, the Nasdaq jumping 6.6%, and the Dow Jones gaining 2.5%. The momentum followed President Trump’s twin reassurances: “no intention of firing” Federal Reserve Chair Jerome Powell and plans to reduce tariffs on China, stating that the “145% tariffs…will come down substantially.”
The combination of political stability and optimism around trade helped the S&P 500 record four consecutive daily gains for the first time since January.
“Just knowing there’s a pivot in place, that the administration is willing to pull back, I think is a positive,” said Mark Newton, head of technical strategy at Fundstrat.
Upcoming Economic Data to Inform Market Sentiment
The optimism on Wall Street will be tested by three critical reports this week:
GDP (Wednesday):
Economists forecast a significant slowdown in U.S. economic growth, projecting just 0.1% GDP growth for Q1 2025, down sharply from 2.4% in Q4 2024. If accurate, it would mark the slowest quarterly growth since 2022, raising concerns that tariff policy could be stalling momentum.
Core PCE Inflation (Wednesday):
The Fed’s preferred inflation gauge is expected to ease. March’s annual core PCE is projected at 2.5%, down from 2.8% in February. On a monthly basis, inflation is expected to have risen just 0.1%, signalling a possible deceleration in consumer price growth. The outcome could influence the Fed’s next steps on interest rates.
Jobs Report (Friday, 8:30 a.m. ET):
April’s jobs report is expected to show 133,000 new nonfarm payrolls with the unemployment rate holding steady at 4.2%. While this would reflect a decline from March’s 228,000 additions, economists still see a resilient labour market. “The labour market continues to tread water,” wrote Wells Fargo economist Jay Bryson in a client note.
Earnings from Key Sectors to Gauge Corporate Resilience
Investors will also be closely watching a slate of earnings reports from major S&P 500 players, particularly in tech and consumer sectors. Apple, Amazon, Microsoft, Meta, Chevron, Eli Lilly, and Coca-Cola are among the 180 companies set to release results.
Key investor focuses include AI investments, tariff-related cost pressures, and signs of shifting consumer demand. The technology sector has led much of the recent rally, and market participants will be looking to see whether earnings justify the optimism.
Technology Equities Drive Gains but Seek Confirmation
Tech stocks fuelled the recent rally. Tesla jumped 18% amid renewed enthusiasm for Elon Musk’s leadership and policy changes around self-driving cars. Nvidia, Amazon, and Meta each gained about 9%, while Alphabet rose 7% after reporting strong earnings.
Still, year-to-date performance for these leaders remains below 2024 peaks, signalling that investors are waiting for a fresh catalyst to sustain momentum.
“While we don’t think we’re out of the woods, we must respect history and how market corrections begin to find their footing as the primary problem begins to ‘heal’,” noted Michael Kantrowitz, chief investment strategist at Piper Sandler.
Conclusion
Wall Street is now facing a test grounded in data after weeks of market gains driven largely by tone and outlook. Inflation trends, growth figures, and corporate earnings will either support the rebound or expose weaknesses in the economic recovery.