Wall Street's winning streak hit a wall Monday as investors turned cautious ahead of a heavy week packed with earnings reports and key economic updates. The S&P 500 (SPY, Financial) slipped 0.82%, ending a four-day run, while the Nasdaq (QQQ, Financial) fell 1.25% at 12.14pm today, weighed down by weakness across major tech names. With Microsoft (MSFT, Financial) and Apple (AAPL, Financial) set to report, and fresh data on jobs and inflation on deck, markets are bracing for more clarity on how deeply the tariff standoff under President Donald Trump is cutting into corporate performance. Bond yields were largely steady, and the dollar edged lower, reflecting a tentative mood across assets.
Despite last week's rally, market strategists see little evidence that volatility is behind us. Chris Larkin at E*Trade from Morgan Stanley highlighted that equities may remain rangebound until investors get a clearer read on earnings impacts from tariffs, which remain difficult to gauge. Treasury Secretary Scott Bessent confirmed U.S.-China trade talks are ongoing but stressed the next move must come from Beijing. International Business Machines (IBM, Financial) added to the corporate headlines, announcing a $150 billion investment plan across the U.S. over the next five years, in a move aligned with broader economic shifts post-election.
Morgan Stanley's Michael Wilson pointed out that while a weaker dollar could help U.S. earnings outperform globally, a material move higher for the S&P 500 would likely require a trade breakthrough, a solid recovery in earnings estimates, and a softer monetary backdrop. JPMorgan strategists echoed that view, advising investors to sell into rallies unless broader trade deals materialize. With the S&P 500 projected to trade between 5,000 and 5,800 points, the next few weeks could set the tone for whether markets stay stuck in a holding pattern—or find fresh momentum to break higher.
