By US stocks opened mostly flat as investors braced for a busy week of earnings reports and key economic data, with Wall Street also awaiting developments in US-China trade negotiations.
The S&P 500 saw a slight gain of 0.1% on Monday, while the Nasdaq Composite fell by 0.1%. The Dow Jones Industrial Average surged by 179 points, or 0.4%.
Treasury Secretary Scott Bessent provided little clarity on the status of a potential trade agreement with China, but emphasized that the responsibility for reaching an agreement does not lie solely with the US.
US-China trade war uncertainty continues
Treasury Secretary Scott Bessent emphasized that the responsibility for reaching a trade agreement with China lies with the country itself.
In an interview on CNBC’s Squawk Box, Bessent stated:
“I believe that it’s up to China to de-escalate, because they sell five times more to us than we sell to them, and so these 120%, 145% tariffs are unsustainable.”
Bessent also noted that the US has made progress in its trade negotiations, highlighting India as a likely candidate for an agreement among the 15 to 18 key trading relationships currently under discussion.
“We’ve had many countries come forward and present some very good proposals, and we’re evaluating those,” he said, adding, “I would guess that India would be one of the first trade deals we would sign. So watch this space.”
“Recent days have brought indications of some easing in US-China trade tensions, with both sides chipping away at the unsustainable tariff rates implemented earlier this month and the US signaling some intent to de-escalate,” said Barclays economist Jonathan Millar in a recent note.
“This is mostly talk, for now, and we remain skeptical that there will be enough concrete momentum in trade discussions to sidestep a US recession.”
Earnings season gains pace
Investors are also gearing up for the busiest week of the first-quarter earnings season, with over 180 S&P 500 companies set to report results.
Notable earnings reports will come from four of the ‘Magnificent Seven’—Amazon, Apple, Meta Platforms, and Microsoft—alongside financial, staples, and healthcare companies such as Visa, Coca-Cola, and Eli Lilly.
So far, earnings have been somewhat strong, with 73% of companies reporting better-than-expected results, slightly below the five-year average of 77%, according to FactSet.
However, Wall Street has lowered expectations for the second quarter and full year due to uncertainty surrounding President Trump’s tariffs.
As April draws to a close, stocks have experienced significant volatility, influenced by Trump’s tariff plans, which were later softened.
The S&P 500 is down over 1% for the month, while the Dow is on track to lose about 4%.
The Nasdaq Composite has gained 0.4%. The S&P 500 briefly entered bear market territory on April 7 but has since recovered, although it has struggled to break through key resistance levels.
This week will also bring multiple reports on the labor market, along with key data on inflation and economic growth.
The highlight will be Friday’s nonfarm payrolls report, while Wednesday will see first-quarter GDP data and the Federal Reserve’s preferred inflation measure.
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