Stocks retreated on Monday as investors braced for a crucial week filled with heavyweight tech earnings and key economic data that could shine light on the U.S. economy’s resilience amid President Trump's aggressive tariff policies.
The S&P 500 (GSPC) fell 0.7%, snapping last week’s momentum. The Dow Jones Industrial Average (DJI) shed 0.3%, while the Nasdaq Composite (IXIC) led losses with a 1.2% decline, dragged down by weakness in Nvidia (NVDA), Tesla (TSLA), and other tech giants. The pullback comes after Wall Street posted its longest daily winning streak since January.
Market Movers:
- Nvidia (NVDA) -4.1%: Shares slid after reports surfaced that China's Huawei is preparing to launch a new AI chip, potentially sidestepping U.S. export restrictions. Investors fear the emergence of a competitive alternative could dent Nvidia’s dominant position in the fast-growing AI chip market.
- Tesla (TSLA) -3%: Tesla fell after last week's 18% rally, with investors locking in profits and fretting over the company's exposure to trade risks. Although Tesla remains a leader in the EV space, concerns linger about how tariffs and slowing global demand could affect deliveries and margins.
- Apple (AAPL) -0.3%: Shares dipped slightly ahead of its earnings report later this week. With tariffs raising supply chain costs and consumer spending under pressure, analysts are closely watching Apple’s forward guidance for signs of resilience — or stress.
- Amazon (AMZN) -1.8%: Amazon fell sharply as retail and tech stocks sold off. Investors are cautious ahead of its earnings report, which is expected to reflect the impact of tariff-driven costs and potential slowdowns in cloud services and online shopping segments.
- Meta Platforms (META) -0.26%: Meta slipped marginally amid broad tech weakness. Analysts remain bullish on Meta’s long-term AI investments but note that any ad revenue softness tied to economic uncertainty could weigh on short-term results.
Big Week for Big Tech Earnings
This week is a pivotal stretch for the stock market as four of the "Magnificent Seven" — Apple, Amazon, Meta, and Microsoft — prepare to report quarterly results. Given their outsized weight in major indexes, any earnings surprises, positive or negative, could sharply move markets.
Expectations are high following last week’s rebound, and Wall Street is looking for reassurance that tech titans can maintain growth despite macro headwinds. Traders are also watching for commentary on tariffs, inflationary pressures, and AI innovation — all crucial themes for the sector's performance going forward.
Tariffs and Economic Uncertainty Weigh on Business Sentiment
New data from the Dallas Federal Reserve showed Texas manufacturing activity fell to its lowest levels since May 2020, highlighting the damaging impact of Trump's trade policies. Business leaders cited tariff uncertainty as a major roadblock to planning, forecasting, and capital spending.
The sharp decline in manufacturing sentiment adds to concerns that tariffs are not just affecting stock prices but also actively weakening key parts of the real economy. As more corporate earnings roll out this week, investors will be searching for additional clues about how widespread these impacts have become.
Looking Ahead
Beyond Big Tech earnings, investors are awaiting several major economic reports that could sway markets further. Wednesday’s release of the Personal Consumption Expenditures (PCE) price index — the Fed’s preferred inflation gauge — could significantly influence expectations for future interest rate cuts.
First-quarter GDP data is also on deck, offering a snapshot of how tariffs and economic uncertainty have affected overall growth. Finally, Friday's April jobs report will round out the week, providing critical insight into the health of the labor market. With so much on the line, volatility could easily resurface after last week's optimism.