June S&P 500 E-Mini futures (ESM25) are down -1.09%, and June Nasdaq 100 E-Mini futures (NQM25) are down -1.23% this morning, pointing to a sharply lower open on Wall Street as U.S. President Donald Trump’s threats to fire Federal Reserve chief Jerome Powell weighed on sentiment.
On Friday, National Economic Council Director Kevin Hassett stated that President Trump is examining whether he’s able to fire Powell. A day earlier, Trump posted on social media that Powell’s removal “cannot come fast enough,” while ramping up pressure on the central bank to lower interest rates. Such remarks have stoked worries about the Fed’s independence, dampening investor sentiment.
This week, investors look ahead to key U.S. economic data releases, remarks from Federal Reserve officials, and a slew of corporate earnings reports, with a particular focus on results from “Magnificent Seven” stalwarts Tesla and Alphabet.
In Thursday’s trading session, Wall Street’s major equity averages ended mixed. UnitedHealth Group (UNH) plummeted over -22% and was the top percentage loser on the Dow and S&P 500 after the managed care giant posted downbeat Q1 results and cut its FY25 adjusted EPS guidance. Also, chip stocks lost ground, with Nvidia (NVDA) and Broadcom (AVGO) sliding more than -2%. In addition, Alcoa (AA) slumped about -7% after reporting weaker-than-expected Q1 revenue and cautioning that tariff-related costs are expected to increase significantly. On the bullish side, Eli Lilly (LLY) surged more than +14% and was the top percentage gainer on the S&P 500 after the company posted Phase 3 trial results for its oral GLP-1 drug, orforglipron, that met primary and key secondary endpoints.
Economic data released on Thursday were mixed. The U.S. Philly Fed manufacturing index tumbled to a 2-year low of -26.4 in April, weaker than expectations of 2.2. Also, U.S. March housing starts fell -11.4% m/m to 1.324M, weaker than expectations of 1.420M, while building permits, a proxy for future construction, unexpectedly rose +1.6% m/m to 1.482M, stronger than expectations of 1.450M. In addition, the number of Americans filing for initial jobless claims in the past week unexpectedly fell -9K to a 2-month low of 215K, compared with the 225K expected.
New York Fed President John Williams stated on Friday that the U.S. economy is in a “very good place,” and he does not see the need to adjust interest rates “any time soon.” “We need to make sure that any one-time changes in prices don’t pass through into more persistent, higher inflation,” Williams said during an interview on Fox Business.
Meanwhile, U.S. rate futures have priced in an 89.0% probability of no rate change and an 11.0% chance of a 25 basis point rate cut at the next central bank meeting in May.
First-quarter corporate earnings season kicks into high gear this week, with investors awaiting fresh reports from major companies such as Tesla (TSLA), Alphabet (GOOGL), Philip Morris (PM), IBM (IBM), Verizon (VZ), AT&T (T), T-Mobile US (TMUS), Intuitive Surgical (ISRG), Lockheed Martin (LMT), Boeing (BA), GE Aerospace (GE), 3M (MMM), Thermo Fisher Scientific (TMO), ServiceNow (NOW), Texas Instruments (TXN), The Procter & Gamble Company (PG), Merck&Co (MRK), PepsiCo (PEP), AbbVie (ABBV), Gilead (GILD), Bristol-Myers Squibb (BMY), Intel (INTC), and Colgate-Palmolive (CL). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +6.7% increase in quarterly earnings for Q1 compared to the previous year.
Market watchers will also be closely monitoring the preliminary U.S. purchasing managers’ surveys for April for indications of how businesses are responding to President Trump’s announcement of sweeping tariffs. Other noteworthy data releases include the U.S. Richmond Fed Manufacturing Index, New Home Sales, Crude Oil Inventories, Durable Goods Orders, Core Durable Goods Orders, Initial Jobless Claims, Existing Home Sales, and the University of Michigan’s Consumer Sentiment Index.
“The PMI report will be very interesting amid the growth concerns from the trade uncertainty that could show up in lower new orders,” Danske Bank analysts said in a note.
In addition, the Fed will release its Beige Book survey of regional business contacts this week, which provides an update on economic conditions in each of the 12 Fed districts. The Beige Book will offer insight into the extent to which government policy and uncertainty are affecting business decisions. Notably, the report is published two weeks before each meeting of the policy-setting Federal Open Market Committee.
A host of Fed officials will be making appearances throughout the week, including Goolsbee, Jefferson, Harker, Kashkari, Kugler, Waller, and Hammack.
Today, investors will focus on the Conference Board’s Leading Economic Index for the U.S., which is set to be released in a couple of hours. Economists expect the March figure to be -0.5% m/m, compared to the previous number of -0.3% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.336%, up +0.21%.
Major European markets are closed today in observance of Easter Monday.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.45%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.30%.
China’s Shanghai Composite Index ended higher today on hopes that Beijing would roll out stimulus measures to mitigate the impact of the trade war with the U.S. Resources and software stocks outperformed on Monday. Sentiment got a boost after Chinese Premier Li Qiang urged government officials on Friday to intensify efforts to stabilize the stock market. Meanwhile, China left benchmark lending rates unchanged on Monday for the sixth consecutive month, as expected, with policymakers likely waiting to gauge the impact of the trade war with the U.S. before introducing additional economic stimulus measures. The one-year loan prime rate remained at 3.1%, while the five-year LPR was kept at 3.6%, according to the People’s Bank of China. In other news, China unveiled a plan on Friday to open its service sector further, proposing the removal of foreign equity limits for app store services and the extension of a pilot program to additional cities. Investors are awaiting further updates on the U.S.-China trade talks after U.S. President Trump mentioned last week that he was in communication with the “highest levels” of the Chinese government regarding a potential trade deal. At the same time, China cautioned nations on Monday against entering trade agreements with the U.S. that could harm Chinese interests. Investors are also waiting for the upcoming month-end politburo meeting for signals on potential policy support. In corporate news, Contemporary Amperex Technology rose over +2% after launching the second generation of its “Shenxing” fast-charging battery.
Japan’s Nikkei 225 Stock Index closed lower today, snapping a two-day winning streak as a stronger yen weighed on sentiment. Export-oriented stocks led the declines on Monday as the yen climbed to its highest level against the dollar since September, with shaky confidence in U.S. assets further undermined by U.S. President Donald Trump’s criticisms of the Fed. A stronger Japanese currency typically weighs on exporters’ shares, as it reduces the value of overseas earnings in yen terms when companies bring them back to Japan. Meanwhile, investors continue to closely monitor trade developments following the “big progress” in the Japan-U.S. talks last week. Japan is reportedly weighing an increase in soybean and rice imports as a concession to the U.S. Japanese Finance Minister Katsunobu Kato is set to travel to Washington later this week, where he is expected to hold talks with U.S. Treasury Secretary Scott Bessent on currency rates. Investor focus this week is also on Tokyo’s consumer price data, a bellwether for national inflation, which is expected to show price increases by companies at the start of Japan’s new fiscal year in April. In corporate news, Oji Holdings climbed over +6% after the paper products maker boosted its dividend payout ratio and announced a share buyback. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +7.73% to 33.85.
Pre-Market U.S. Stock Movers
Tesla (TSLA) fell over -3% in pre-market trading after Reuters reported that the production launch of the company’s more affordable vehicles, including the stripped-down version of the Model Y, has been postponed.
Amazon.com (AMZN) slid more than -1% in pre-market trading after Raymond James downgraded the stock to Outperform from Strong Buy.
Salesforce (CRM) dropped over -1% in pre-market trading after DA Davidson downgraded the stock to Underperform from Neutral with a price target of $200.
Netflix (NFLX) rose nearly +3% in pre-market trading after the streaming giant posted better-than-expected Q1 results and provided solid Q2 guidance.
Spotify (SPOT) gained more than +1% in pre-market trading after Wolfe Research upgraded the stock to Outperform from Peer Perform with a $660 price target.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - April 21st
WR Berkley (WRB), Equity Lifestyle (ELS), Medpace Holdings (MEDP), AGNC Invest (AGNC), Western Alliance (WAL), Comerica (CMA), Wintrust (WTFC), Zions (ZION), BOK Financial (BOKF), Cadence Bancorp (CADE), Hexcel (HXL), ServisFirst Bancshares (SFBS), Cathay (CATY), Bank of Hawaii (BOH), AZZ (AZZ), Calix (CALX), Dynex Capital (DX), Hbt Fin (HBT), Metropolitan Bank (MCB), Capital City Bank (CCBG), TrustCo Bank NY (TRST), Washington Trust (WASH), SmartFinancial Inc (SMBK), Guaranty Bancshares (GNTY), Home Bancorp (HBCP), Flexsteel (FLXS).
