Super week is coming! Non-farm payrolls clash with tech giants' financial reports. Can the rebound momentum in the US stock market continue?

Over the past week, with Trump's speech easing investors' concerns about the escalation of the US-China trade war and damage to the independence of the Federal Reserve, US stocks have seen a strong rebound. The S&P 500 index rose 4.5% for the week, the Dow Jones Industrial Average rose 2.5%, and the tech-heavy Nasdaq Composite Index performed particularly well, climbing 6.6% in total. After the major stock indices recovered the lost ground from before the tariff announcement on April 2nd, the market is gearing up for a week of intensive release of economic data and corporate earnings reports. On the economic data front, ahead of the April non-farm payroll report to be released on Friday at 8:30 pm Beijing time, inflation data for the first quarter and GDP growth rate will be the focus. At the corporate level, 180 S&P 500 component stocks will disclose quarterly reports, with giants like Apple Inc. (AAPL.US), Amazon.com, Inc. (AMZN.US), The Coca-Cola Company (KO.US), Eli Lilly and Company (LLY.US), Meta (META.US), Microsoft Corporation (MSFT.US), and Chevron Corporation (CVX.US) being the most anticipated. Policy Shifts Fuel Rebound Last week's stock market surge was fueled by the Trump administration's signals of moderation on two key issues. Trump told reporters last Tuesday that he had "no intention" of firing Federal Reserve Chairman Powell, reversing market expectations that had led to a nearly thousand-point drop in the Dow the previous day. He also hinted at reducing the 145% tariffs on Chinese goods, saying that the tariffs would be "greatly reduced." Mark Newton, head of global technical strategy at FundStrat, said, "In the absence of substantive negotiations, the market has made significant progress. Just the certainty of a policy shift, and the willingness of the government to retract radical measures, is enough to be positive." These statements helped the S&P 500 achieve its first four consecutive rises since January, but strategists believe that the shadow of tariffs has not completely dissipated. Michael Kantrowitz, Chief Investment Strategist at Piper Sandler, wrote in a report to clients, "Although the crisis has not been completely resolved, historical experience suggests that when the core conflicts begin to ease, market corrections tend to stabilize gradually." Concerns about Growth Prospects Market concerns about tariffs partly stem from fears of a sharp slowdown in the US economy. The GDP data for the first quarter, released on Wednesday, will reveal the economic conditions before Trump raised the actual tariff rate to a record high this century. Economists expect the annualized growth rate for the first quarter to plummet to 0.1%, a sharp decrease from the 2.4% in the fourth quarter of 2024. If the forecast is accurate, this will be the slowest quarter of growth since 2022. Inflation Indicators Under Scrutiny The core personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, also garnered attention on the same day. Before the tariff factors are transmitted to the data, economists expect the year-over-year increase in core PCE for March (excluding the highly volatile food and energy categories) to fall to 2.5% (from 2.8% previously), with a monthly growth rate expected to drop to 0.1% (from 0.4% previously). Labor Market Resilience Despite signs of economic slowdown, the labor market remains strong. Economists expect this trend to continue with the release of the April employment report on Friday. Data shows that non-farm payrolls for April are expected to increase by 133,000, with the unemployment rate expected to remain at 4.2%. In comparison, the US economy added 228,000 jobs in March, while the unemployment rate rose to 4.2%. A report from Wells Fargo & Company's economic research team, led by Jay Bryson, stated, "The labor market continues to be stable. While the trade policy suddenly changed throughout the month, we suspect employers have adopted a wait-and-see approach." Tech Giants Leading the Market Tech stocks have led the recent market rally. Over the five trading days, including a significant sell-off on Monday, Tesla, Inc. (TSLA.US) saw its stock price rise by about 18% as investors were optimistic about CEO Musk's statement of reducing his time in government positions and new autonomous driving rules. Meanwhile, the stocks of "Seven Giants" tech companies NVIDIA Corporation (NVDA.US), Amazon.com, Inc., and Meta rose by about 9%. Alphabet Inc. Class C (GOOGL.US) reported positive earnings, pushing its stock price up by 7%. However, the chart trends from the beginning of the year serve as a reminder to investors that there is still a significant downturn in US stocks that needs to be recovered. With upcoming earnings reports from Apple Inc., Amazon.com, Inc., Meta, and Microsoft Corporation, investors will focus on how changes in the tariff environment and intense competition in the AI sector are reshaping the growth prospects of these companies. These earnings reports may be crucial catalysts in determining whether the market can sustain its rebound.