Busy US earnings week confronts market grappling with tariff woes

A heavy slate of US company results in the coming week will test a stock market shaken by a US trade policy overhaul that upended the outlook for the global economy and corporate America.

Investors remain on edge after President Donald Trump’s sweeping April 2 tariff announcement stunned markets and sparked some of the most volatile trading since the onset of the COVID-19 pandemic five years ago.

After rebounding somewhat last week, the benchmark S&P 500 stock index fell this week and was down 14% from its February record high. Volatility levels moderated from five-year peaks but remain elevated by historic measures.

Tesla and Google parent Alphabet - two of the so-called Magnificent Seven megacap companies whose shares have faltered after two years of stock leadership - are among those closely watched for financial results as investors seek guidance about the fallout from tariffs that are very much in flux.

“The view of the CEOs going forward has never been more important,” said JJ Kinahan, CEO of IG North America and president of online broker Tastytrade.

Companies and investors are grappling with a tariff landscape poised to keep shifting as the Trump administration negotiates with other countries. While he has paused some of the heftiest levies on imports, the U.S. is also locked in a trade battle with China, the world’s second-largest economy.

Economists polled by Reuters this week put odds of a recession in the next year at 45%, up from 25% last month.

In one corporate report this week that caught the attention of investors, United Airlines laid out two scenarios for the year, including one warning of a significant hit to revenue and profit if there is a recession.

United’s dual forecast provided a type of “roadmap” by acknowledging and quantifying risks, said Julian Emanuel, head of equity and derivatives strategy at Evercore ISI.

“Putting parameters on what may unfold is how stakeholders ... make decisions in an environment where traditional guidance is bound to be considered relatively unreliable,” Emanuel said in a note on Thursday.

Elon Musk’s electric vehicle maker Tesla, which reports results on April 22, is in the spotlight in part because of the billionaire’s close ties to Trump.

Alphabet will be watched for any detail on advertising spending and capital expenses tied to artificial intelligence capacity, as investors scrutinize AI project costs. The company was dealt a setback on Thursday, when a judge ruled Google illegally dominates two markets for online advertising technology. All the Magnificent Seven megacap stocks are sharply lower in 2025, with Alphabet down about 20% and Tesla off 40%.

The Magnificent Seven “led everything to the upside,” Kinahan said. “If they can’t continue to perform, I think it gives people a pause overall, especially as we’re looking for footing after the last couple of weeks.”

Boeing’s results are also in focus, after China reportedly ordered its airlines not to take further deliveries of the planemaker’s jets. IBM, Merck, Intel and Procter & Gamble are among the major U.S. companies set to post results in the coming week.

Projections for US profit growth have pulled back, with S&P 500 earnings estimated to rise 9.2% in 2025, down from the 14% gain estimated at the start of the year, according to LSEG IBES data. Investors are bracing for even greater contraction as companies report results.

The market’s attention was also on the Federal Reserve, after Trump said Fed Chair Jerome Powell’s termination “cannot come fast enough,” while calling for the US central bank to cut interest rates. A day earlier, Powell said the Fed would wait for more data before changing rates.

Investors will be hoping that the heart of earnings season can restore more calm to markets. The Cboe Volatility index , an options-based measure of investor anxiety, hit around 60 in the aftermath of Trump’s tariff announcement, but has since pulled back to about 30.

Ayako Yoshioka, senior investment strategist at Wealth Enhancement, said the index would need to recede to the “mid-teens in order to say maybe that volatility has subsided a little bit.”

If it stays around 30, Yoshioka said, “it doesn’t mean we’re out of the woods.”

Asian shares were mostly higher in thin Good Friday trading after a bumpy ride on Wall Street, where the Dow industrials lost 1.3% as UnitedHealth shed more than a fifth of its value due to a weaker-than-expected profit report.

US stock and bond markets will be closed on Friday. Tokyo’s Nikkei 225 gained 1% to 34,730.28, while the Kospi in South Korea rose 0.5% to 2,483.42.

Taiwan’s Taiex gained 0.3% and regional tech companies advanced after global heavyweight Taiwan Semiconductor Manufacturing Co. reported a profit for the latest quarter that matched analysts’ expectations. Perhaps more importantly, it also said it hasn’t seen a drop-off in activity from its customers because of President Donald Trump’s trade war, as some other companies have suggested.

Agencies