Markets surged last week, fueled by impressive earnings and easing U.S.-China tensions. Major indices delivered substantial gains, marking one of the strongest weekly performances this year. Notably, the S&P 500 extended its longest winning streak since 2004, signaling increased investor optimism. Internationally, Europe’s FTSE 100 also reached new highs, suggesting global confidence is returning despite lingering economic challenges.
Big tech was once again at center stage, with companies like Microsoft and Meta exceeding expectations. Microsoft continued to impress investors with its strong cloud and AI-driven performance, while Meta’s solid growth in user engagement validated recent strategic investments. However, results from Apple and Amazon were mixed; Apple notably reported a $900 million earnings hit from recent tariffs, emphasizing ongoing trade risks. Travel and leisure companies like Royal Caribbean also beat forecasts, showing consumer spending remains resilient, even amid economic uncertainties.
Economic data added to the optimistic mood, with U.S. employment numbers beating expectations and signaling a stronger-than-anticipated economy. The positive job report helped offset concerns over a small contraction in first-quarter GDP, largely attributed to a temporary surge in imports ahead of tariffs. Meanwhile, inflation remains stubbornly above the Fed’s target, complicating its monetary policy path. On a more hopeful note, easing tensions between the U.S. and China, marked by new tariff exemptions and a willingness to resume trade talks, significantly boosted market sentiment.
What’s Coming Up This Week in the Market?
We’ve got an interesting week ahead, folks. Stocks have been climbing back nicely after the tariff news hit the market hard last month. The rally has investors feeling pretty good again—but let’s not get ahead of ourselves. Plenty of big headlines are on the way that could easily shake things up.
All Eyes on the Fed
The Fed is meeting this week, and as usual, everyone’s watching closely. Sure, they’re almost definitely going to keep rates unchanged, but the real action will be in the details of their statement. Investors love reading between the lines, and any hint about potential rate cuts down the road could trigger a big reaction.
Personally, I’m expecting Fed Chair Jerome Powell to stay cautious but optimistic. With GDP numbers dipping a bit (mostly because companies rushed to import goods ahead of tariffs), the Fed probably doesn’t want to rock the boat too much. They’ll likely signal they’re ready to step in if things start looking shaky, but don’t bet on a solid promise just yet.
Jobs are Strong, But
April’s jobs report surprised everyone by showing the labor market is still going strong. That’s good news, especially after all the doom and gloom predictions we heard about tariffs sinking the economy. It means companies are confident enough to keep hiring—for now.
The tricky part is figuring out how long this lasts. Sure, hiring is steady, but if trade tensions keep lingering, businesses might get cautious again. I’m watching closely for any signs of slowdown in manufacturing and technology sectors, as these are often the first to feel the pinch from tariffs.
Earnings Season Rolls On
Earnings season isn’t done yet, and this week brings some big-name reports. We’ve got AI favorite Palantir, entertainment giant Disney, and ride-share leader Uber all reporting earnings.
Investors have gone a bit AI-crazy lately, and Palantir’s numbers could either fuel that excitement or throw cold water on it fast. I’m particularly curious if Palantir’s business is actually growing as fast as investors hope—or if the AI hype might be getting a little ahead of itself.
Disney and Uber will also be key indicators of consumer sentiment. Are people still spending on experiences, streaming, and services? Or is inflation finally making people think twice about discretionary purchases? These companies’ earnings calls usually offer valuable clues about broader consumer trends, so pay attention to what management says about the rest of the year.
Don’t Expect Smooth Sailing
Even though the market’s looking better lately, I wouldn’t get too comfortable yet. Tariff worries, global politics, and lingering economic questions haven’t gone anywhere. And honestly, after such a quick run-up, stocks might be due for a breather. A little pullback could actually be healthy, giving investors a chance to jump back in at better prices.
Personally, I’m staying cautious and looking to take advantage of dips rather than chasing gains right now. The key is to stay selective, focusing on companies with solid fundamentals and avoiding speculative bets.