Investors will watch next week to see if stocks can keep up their momentum off the April lows as uncertainty around trade persists. Wall Street is also turning to Washington as Republican lawmakers try to push through tax cuts. The market soared this week, with the S & P 500 rising more than 5%, after the U.S. and China agreed on Monday to temporarily cut tariffs on their respective goods for 90 days. President Donald Trump also said Friday that his administration will send letters out to countries in the next two-to-three weeks that detail ” what they’ll be paying to do business ” with the U.S. Trump has also hinted that agreements with South Korea, India or Japan could be coming. But without more trade developments over the coming days, the market may not be able to keep up its latest rally. “We’re going to have to see continued positive headlines on trade that are enough for investors to believe that they can still bid up stocks and still move them higher,” Anthony Saglimbene, chief market strategist at Ameriprise Financial, told CNBC. He added, though, that stocks are “not cheap again” and “approaching levels that are overbought.” .SPX YTD mountain S & P 500, year-to-date Indeed, the S & P 500 turned positive on the year this week after the deal between the U.S. and China was announced. The benchmark has also made up all of its losses since Trump’s April 2 tariff announcement, which led to a dip into bear market territory — down 20% from a February all-time high. Month to date, the index has a gain of about 7%, with DataTrek Research estimating that Big Tech accounted for 60% of those gains through Thursday’s close. “Magnificent Seven” members Nvidia and Tesla are up more than 24% each, while Meta Platforms and Microsoft have risen more than 16% and about 15% this month, respectively. Amazon has also popped more than 11%. “I think the market is thinking that we’re just going back to pre-tariffs and everything is fine, and I think the world has changed,” said Peter Boockvar, chief investment officer at Bleakley Financial Group. “I find it hard to believe that we’re going to sustain these levels. I understand the rally, no doubt, but keeping it here I think is going to be tough.” If history is any guide, investors shouldn’t let their guard down yet. CFRA Research chief investment strategist Sam Stovall noted that two of every three bear markets started with a double-digit decline, followed by a bounce to near the S & P 500’s 200-day moving average — only to fall to an even lower low. “We might think that things are heading higher, but history would say, be careful about being too optimistic too soon,” he said. “There could be more volatility ahead simply as we get economic data that sort of contradicts one another.” The state of the consumer Uncertainty surrounding Trump’s tariffs has pressured not just on stocks but the consumer as well, as April’s consumer sentiment reading dropped to its second-lowest on record . Retailers like Home Depot and Target — which are set to report earnings Tuesday and Wednesday, respectively — could provide more insight on that front. “Retail earnings are most relevant, not just in terms of gauging the state of consumer spending but also the extent of which retailers are looking to pass on tariffs to the end consumer,” Bleakley’s Boockvar said. “We know price increases are coming, but where along the supply chain are they going to get eaten? Is it going to be early in that chain and not passed on to the consumer, or is it going to sort of flow through?” Target, which sees about 30% of its imports coming from China, has already warned about raising prices. Fellow retail giant Walmart warned Thursday that price hikes could start as early as later this month . Mattel also said this month that it will increase prices as a result of tariffs. “Walmart sort of reminded us that we’re not in Kansas anymore, so to speak,” Boockvar added. Ameriprise’s Saglimbene pointed out that tariffs are still high compared to last year despite the temporary U.S.-China levy detente — which could have some impact on guidance. TJX , whose quarterly results are due out Wednesday, said in its February earnings call that its full-year guidance still ” assumes a small negative impact in the first half of the year ” despite goods from China making up only a bit of its business. Taxes House Republicans took a step forward in advancing President Donald Trump’s legislative agenda Wednesday, when the House Ways and Means Committee passed a tax bill that includes trillions of breaks . However, Friday saw the House Budget Committee vote against a sweeping agenda package that includes the tax bill. This is a knock to lawmakers, who hope to push the megabill through the House by Memorial Day with a vote coming as early as next week. “I think it’s a pretty big risk for the bond market,” Eric Johnston, chief equity and macro strategist at Cantor Fitzgerald, told CNBC’s ” The Exchange ” on Thursday. “We’re talking about a reconciliation bill that is likely to be, at best, keeping the deficit where it is and in all likelihood have the deficit actually rise.” As it stands, the tax bill could add $2.5 trillion to the deficit over the next decade if none of the language of the bill changes in the Senate, Barclays estimates show. “We’re likely going to see the economy slow down, and we’ve also seen oil prices come down, so those do help the bond market. But I think that net net, the risk from here is yields to the upside,” Johnston continued. The benchmark 10-year Treasury note yield briefly topped the key 4.5% level this week. A substantial move above that mark would rattle investors. “That could be enough to cool things down on this rally,” Boockvar said. Week ahead calendar All times ET. Tuesday Earnings: Home Depot , Keysight Technologies , Palo Alto Networks Wednesday 7 a.m.: Mortgage applications (week ended May 16) 10:30 a.m.: EIA crude inventories (week ended May 16) Earnings: Lowe’s , Target , TJX Thursday 8:30 a.m.: Initial jobless claims (week ended May 17) 8:30 a.m.: Chicago Fed National Activity index (April) 9:45 a.m.: S & P Global Composite PMI (May preliminary) Earnings: Ralph Lauren , Analog Devices , Ross Stores , Deckers , Intuit , Workday , Autodesk , Copart Friday 8:30 a.m.: Building permits (April) 10 a.m.: New home sales (April) — CNBC’s Michael Bloom and Fred Imbert contributed reporting.
Wall Street heads into next week looking for more trade details, consumer clues from retailers
May 16, 2025
