S&P 500 price edges higher as rate cut hopes offset tariff concerns
The S&P 500 edges higher as Honeywell rallies and tariff uncertainty weighs on corporate forecasts
U.S. stocks gained momentum on Tuesday, buoyed by growing expectations of Federal Reserve rate cuts following softer economic data. The S&P 500 and Nasdaq Composite both climbed 0.7%, while the Dow Jones Industrial Average rose by 300 points. Investors reacted to signs of a cooling labor market, with U.S. job openings falling to 7.19 million in March, missing forecasts of 7.5 million. Meanwhile, the CB consumer confidence survey showed a rise in pessimism, reinforcing the case for monetary easing.
Markets have now priced in around 100 basis points of cuts by the Federal Reserve for 2025, double the 50 basis points signaled by policymakers last month. While lower borrowing costs are seen as a positive catalyst, rising trade tensions continue to cloud the broader outlook. The U.S. trade deficit widened to a record level as tariffs weighed on exports, adding another layer of uncertainty.
S&P 500 price dynamics (January 2025 - April 2025) Source: TradingView.
Corporate earnings highlight resilience and risks
Earnings season delivered a mixed picture. Honeywell led industrial gains, jumping nearly 5% after raising its full-year profit outlook to $10.20–$10.50 per share. Royal Caribbean also surged 5.4% after strong quarterly results driven by record WAVE season bookings. Hims & Hers Health soared over 39% after securing a distribution agreement with Novo Nordisk for weight loss drug Wegovy.
On the downside, General Motors fell 2% despite beating earnings estimates, as it paused buybacks and withdrew its full-year outlook citing tariff risks. Pfizer edged higher after topping profit forecasts but warned about uncertainties tied to global trade tensions. Spotify and Regeneron posted disappointing results, slipping 5% and 7.5%, respectively, while Waste Management declined 2% after missing revenue expectations.
Focus turns to Big Tech and tariff developments
With Microsoft, Meta Platforms, Apple, and Amazon set to report this week, the market’s next major catalyst will come from the tech sector’s earnings performance. Given the heavy weighting of technology stocks in major indexes, their results could heavily influence the market’s direction. Meanwhile, traders remain cautious as political developments surrounding tariffs and trade policy have the potential to trigger sharp sentiment shifts.
As previously discussed in our recent S&P 500 technical analysis, the index was approaching major resistance levels near 5,565–5,570, and volatility was expected to increase around earnings and trade policy news. The market’s resilience so far aligns with the earlier projected consolidation phase, but traders should stay alert for quick swings as new data emerges.
