This week, the trend of US stocks still depends on the "mood" of tariffs. Alphabet Inc. Class C (GOOGL.US) and Tesla, Inc. (TSLA.US) will release their heavyweight financial reports.

The Trump administration's tariff policy has been inconsistent, putting pressure on the stock market. Last week, the Dow fell by 2.66%, the Nasdaq fell by 2.62%, and the S&P 500 index fell by 1.5%. In the coming week, Trump's policies will continue to be a focus of market attention, while several S&P 500 index component companies will release their quarterly earnings. Earnings reports from Alphabet Inc. Class C (GOOGL.US), Tesla, Inc. (TSLA.US), Chipotle Mexican Grill (CMG.US), Boeing Company (BA.US), and Verizon (VZ.US) will lead the market this week, with over 120 S&P 500 index component companies expected to release quarterly earnings. The economic data in the US is expected to be relatively quiet this week, with a focus on manufacturing and service sector activities, as well as consumer confidence data. Uncertainty hangs over the market Trump's policies are still at the forefront of market narrative. On Wednesday, as investors began to realize that Trump's tariffs would raise costs for major companies and that these policies could pose challenges to the broader US economic outlook, the market experienced a steep sell-off. This sell-off was triggered by NVIDIA Corporation (NVDA.US), which revealed last Tuesday night that new restrictions by the US government on its exports of chips to China would result in a loss of $5.5 billion. Federal Reserve Chairman Jerome Powell stated in a speech that the Fed would wait for "more clear" information before considering any rate adjustments, leading to an exacerbation of the market sell-off. Sylvia Jablonski, CEO and Chief Investment Officer of Defiance ETFs, said, "Ultimately, the market continues to face uncertainty." In the short term, strategists do not believe that the outlook will become clearer. Stuart Kaiser, head of Citi's US stock trading strategy, said that the next few weeks are crucial for the direction of the entire summer market. Kaiser said, "We need to see some good news on tariffs, especially good news from our major trading partners." He added, "Otherwise, the market will have to truly start raising the likelihood of an economic recession, because they believe the tariff rates will be higher than expected, and implementation time will be longer." Heavyweight earnings on the horizon So far, only 12% of the companies in the S&P 500 index have reported their first quarter earnings, but the early sampling results are below average. Data from FactSet shows that 71% of S&P 500 index component companies have reported earnings per share above Wall Street expectations, lower than the five-year average of 77%. The magnitude by which these companies exceeded expectations is also lower than in previous years. At the beginning of earnings season, companies beat analyst expectations by 6.1%, lower than the five-year average of 8.8%. With over 20% of S&P 500 index component companies set to report earnings in the coming week, investors will gain a clearer understanding of these trends. Scott Chronert, US stock strategist at Citi, said on Thursday, "Ultimately, the importance of the first quarter earnings season will be in the information it provides, namely how the stock market will price in as corporate executives begin to disclose some tariff impact information." Alphabet Inc. Class C and Tesla, Inc. will kick off the earnings season for the "Big Seven Tech Stocks," tech giants that drove the US stock market higher in 2023 and 2024. So far this year, the "Big Seven Tech Stocks" have lost their luster. Alphabet Inc. Class C's stock price has fallen by nearly 20% this year, while Tesla, Inc.'s stock price has dropped by over 40%. US stocks face "downside" risks Despite recent market volatility, the S&P 500 index has risen by about 6% from its year-to-date low on April 8. However, many Wall Street strategists do not believe that US stocks will rise in the near term. Keith Lerner, co-chief investment officer at Truist, downgraded his view on the US stock market from "neutral" to "attractive decline," which essentially advises investors to consider reducing their allocation to US stocks. Lerner cited weakening prospects for US economic growth as a key factor in the dim outlook for the stock market. He said, "Looking at historical, fundamental, and technical analysis, there is ample evidence that slightly strengthening defense is reasonable." Since 2025, market forecasts for US gross domestic product (GDP) have been generally declining. Expectations for US economic growth are on the decline But as Trump's tariffs escalate concerns about an economic downturn, strategists are beginning to question whether market expectations for economic growth have already fallen to a low enough level. Callie Cox, Chief Market Strategist at Ritholtz Wealth Management, said, "I am not sure if the stock market has fully digested the possibility of an economic recession."