Schwab Market Update

Published as of: April 14, 2025, 9:27 a.m. ET

(Monday market open) Stocks strengthened early Monday after a weekend that saw the Trump administration retreat from harsh trade policies against China. New exemptions for phones, computers, and other electronics appear to be in place, and that's lifting the tech sector early today. Still, confusion hasn't dissipated, as the administration soon announced the exemptions would only be temporary and promised to outline semiconductor tariffs this week.

"The whipsaw effect around the president's implementing tariffs then pausing some then escalating the tariffs against China has been hard for the markets to digest," said Michael Townsend, managing director, legislative and regulatory affairs at Schwab.

Earnings season rolled on today as Goldman Sachs (GS) became the latest major U.S. bank to report, beating analysts' estimates as its counterparts did last Friday. But primary focus shifts to Treasury auctions after that market got jolted last week by concerns that shifting trade policy might steer investors toward "safe havens" outside of U.S. assets. The Treasury is scheduled to auction off a fistful of 3-month and 6-month notes today. Fed speakers also are on tap in a week that includes meetings of the Bank of Canada and the European Central Bank (ECB).  The 10-year yield headed lower this morning but remains above 4.4%, not far from last week's highs.

1. Banks and beyond: Large and small financial institutions dominate the earnings calendar as Bank of America (BAC) and Citigroup (C) loom Tuesday. Goldman Sachs saw its business boosted by strong trading activity last quarter that outweighed a drop in investment banking fees. Reporting also branches out this week to include health care and consumer discretionary names. But more important, perhaps, are Wednesday's quarterly results from ASML (ASML), a key builder of tools used by semiconductor makers. The company's views of the chip chess board could provide clues of how that key sector is doing as investors await big-tech earnings later this month to hear about the chip spending plans of so-called AI "hyperscalers." Another key report is Wednesday's results from chip fabricator Taiwan Semiconductor Manufacturing (TSM). These two earnings updates could cause volatility in U.S. chip stocks including Nvidia (NVDA), Broadcom (AVGO), Intel (INTC), and Advanced Micro Devices (AMD), among others. U.S semiconductor earnings get underway next week with Intel and Texas Instruments (TXN).

2. Spending trends: Though so-called "soft" data like last Friday's sentiment report matter,  consumption data that tracks U.S. consumer spending might get an even closer look from investors. March retail sales start it off Wednesday and continue with March housing starts and building permits Thursday. Earnings from United Airlines (UAL) and J.B. Hunt Transport (JBHT) tomorrow are also possible proxies for U.S. consumer trends, as is the broader transportation sector, though first quarter data is now dated. Companies' outlooks, if they provide any in such uncertain times, instead may offer signs of how businesses and consumers are reacting in real life as the stock market flags and confidence measures weaken.

3. Early earnings read: Through late last week, only 6% of S&P companies had reported first quarter earnings, with 69% of those surpassing analysts' average expectations, FactSet reported. Analysts expect first quarter earnings growth of 7.3%, but what happened last quarter is likely to stay in last quarter, as they say about Vegas. More concerning is how earnings will look in quarters to come depending on the trade war and how long it lasts. The longer the skirmish continues, the more chance that U.S. companies sourcing from China will see their margins compressed. Recent S&P 500 net profit margins have averaged above 12%, but analysts expect most S&P 500 companies to see their net profit margins sink this quarter versus a year ago. As the margin outlook sags, so does the earnings outlook. Analysts now see second quarter S&P 500 earnings growth of 8.2%, down from 9.2% on March 31, FactSet said. Estimated full-year EPS growth fell to 10.6% from 11.3%.

- Apple (AAPL) jumped 5.6% in pre-market trading after the Trump administration's announcement of a temporary tariff exemption for a number of electronic products, including iPhones. Apple has been among the hardest hit mega caps, as close to 90% of iPhones are made in China and China represents about 20% of the market for iPhones. However, JPMorgan Chase (JPM) lowered its price target on Apple, saying several concerns persist.

- Other tech stocks also rose on the tariff exemptions early Monday, including Broadcom (AVGO), Nvidia (NVDA), Super Micro Computer (SMCI), and Micron (MU), all of which gained around 5%.

- Dell (DELL) gained nearly 6% ahead of the open on hopes the technology tariff exemption would help its hardware products. There's been concern that the tariffs might drive more customers toward the cloud and away from physical servers. HP (HPQ) also jumped.

- Best Buy (BBY) climbed nearly 9% in early trading, helped by ideas that the tariff exemptions might ease pain for a company that has heavy exposure to goods made in China.

-Tesla (TSLA) rose 1.8% early Monday, helped by general sentiment improvement related to U.S. trade policy exemptions for China, where Tesla has heavy exposure. Tesla rose 1.8% early Monday.

- The U.S. Dollar Index ($DXY) eased further today after falling to three-year lows last week amid trade uncertainty. A weaker dollar would normally aid U.S. companies selling products abroad, but with ill will generated by tariffs, they may face challenges in their export businesses unrelated to the dollar.

- Gold miner Newmont (NEM) flattened early Monday  after rising nearly 8% Friday as gold prices reached new record highs amid the trade turbulence.

- BP PLC (BP) climbed 3.3% after the oil giant announced a promising oil discovery at the Far South prospect in the Gulf of Mexico. The Far South prospect is a joint venture with Chevron (CVX), which saw shares rise 1.5%. Meanwhile, OPEC slightly lowered its outlook for 2025 global oil demand growth, given tariffs.

- Intel (INTC) added nearly 3% ahead of the open after Bloomberg reported the company is close to a deal to sell a stake in its programmable chips unit to Silver Lake Management.

- Shares of crypto-associated names MicroStrategy (MSTR, 3%) and Coinbase (COIN, 2%) climbed as risk-on trading appeared to return early Monday. Bitcoin (/BTC) rose more modestly, less than 1%.

- Goldman Sachs rose 1.1% in pre-market trading following its strong earnings data. 

- Technically, resistance for the SPX is likely near the 5,500 level, which would represent roughly a 10% decline from the all-time peak reached in February. The SPX remains well below its 200-day moving average.

- The CME FedWatch Tool shows a less than 20% chance of the Fed cutting rates 25 basis points at its early May meeting. The market prices in 76% odds of at least one rate cut by June.

Turbulent market conditions can make anyone worried about their portfolio, and Schwab offers several perspectives that provide ideas to keep in mind at such times:

Market Volatility: What to Do During Turbulence
Bear Market: Now What? 
Market Volatility in Retirement: Are You Prepared? 
Navigating the Markets: Tariffs and Trade

This one-month chart of the U.S. dollar index ($DXY—candlesticks) and the 10-year Treasury note yield (TNX:CGI—purple line) tell a troubling story about two of the cornerstones of the global economy. Last week's dramatic 50-basis point yield gain and the drop to three-year lows in the dollar index raised concerns that recent trade policy uncertainty has investors less confident in U.S. assets as a "safe haven" in troubled times.