A heavy slate of U.S. company results in the coming week will test a stock market shaken by a U.S. 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 (.SPX) 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 (TSLA.O) and Google parent Alphabet (GOOGL.O) - 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.
In one corporate report this week that caught the attention of investors, United Airlines (UAL.O) 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 (BA.N) results are also in focus, after China reportedly ordered its airlines not to take further deliveries of the planemaker's jets. IBM (IBM.N), Merck (MRK.N), Intel (INTC.O) and Procter & Gamble (PG.N) are among the major U.S. companies set to post results in the coming week.
Projections for U.S. 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 and account more for the tariffs.
The market's attention was also on the Federal Reserve, after Trump on Thursday said Fed Chair Jerome Powell's termination "cannot come fast enough," while calling for the U.S. central bank to cut interest rates. A day earlier, Powell said the Fed would wait for more data on the economy's direction before changing rates.
Investors will be hoping that the heart of earnings season can restore more calm to markets. The Cboe Volatility index (.VIX), 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.
Still, that level is well above its long-term median level of 17.6, according to LSEG Datastream.
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."
