🔍 What to watch this week

📆 This earnings season is your opportunity to see how America's biggest companies performed last quarter. But also – and more importantly – you’ll see what they forecast going forward in light of new tariff announcements.

💸 S&P 500 companies are expected to have raised profit by 7.3% last quarter from the same time last year, according to Factset. That would mark the seventh straight quarterly uptick on an annual basis, but it’s noticeably lower than the 11.7% increase Factset pitched at the start of the year.

📉 Over 100 S&P 500 companies have already revised their earnings predictions. 64% (68 out of 107) issued a downgrade, a higher percentage than usual. More tech companies pulled their predictions down than any other sector, which lines up with their stocks being some of the hardest hit in the current selloff.

🥇 But even with a downgrade, the tech sector is still expected to deliver some of the strongest revenue and profit increases this quarter. Only healthcare is predicted to do better. That could bolster the arguments of strategists who see the selloff as a chance to buy tech stocks for less, expecting them to soon recover. However, that resurgence (if it happens) would be pushed a lot further down the line if a trade war breaks out or the US economy stalls.

🐈‍⬛ Bad economic omens are everywhere, after all. Consumer spending makes up 69% of the US economy – and if tariffs push up prices, those all-important shoppers could pull back. That’s not unlikely: JPMorgan sees inflation jumping by 1 to 1.5 percentage points in the months after tariffs start. Naturally, the big bank believes that will drag on the economy.

📅 On the calendar

• Monday: UK Halifax house price index (March), eurozone retail sales (February), US consumer credit (February).
• Tuesday: US small business optimism index (March).
• Wednesday: US Federal Reserve minutes, Japan producer price index (March), China inflation (March), China producer price index (March). Earnings: Delta Air.
• Thursday: US inflation (March).
• Friday: UK economic growth (February), UK industrial production (February), US consumer sentiment (April), US producer price index (March). Earnings: BlackRock, JPMorgan, Wells Fargo.

👀 What you might’ve missed last week

🌎 Global

• OPEC+ announced a much bigger-than-expected production increase. The move is designed to punish members of the oil-producing group for breaching their quotas. But there was plenty of collateral damage, too: the price of the slippery stuff has fallen 10% over the week, due to a combination of pessimistic economic outlooks and this announcement. That, in turn, dragged down a range of energy stocks.

• China’s official purchasing managers’ index (PMI) rose to 50.5 in March. By landing above the “50” point, the reading represents growth in the sector – largely fueled by targeted spending by the government. The services and construction industries fared well over the month, as well, suggesting that the government’s efforts may finally be bearing fruit. Of course, then tariffs came along to potentially ruin it.

• China imposed its own 34% retaliatory tariff on US imports.

🇺🇸 US

• The US president’s reciprocal tariff announcement sparked a stock market selloff. See, the levies were far higher than economists expected, and based on a methodology that many believe is oversimplified and unrepresentative of actual trade conditions. A baseline 10% tariff on all imports into the US starts on April 5th, with 60-plus nations paying even higher taxes from April 9th. Countries are expected to negotiate and retaliate – China has already announced 34% tariffs on US goods. Big banks downgraded their forecasts for the US, anticipating slower economic growth, higher inflation, and more unemployment.

• The US created 228,000 jobs in March, many more than the 140,000 expected. (Although, the unemployment rate reached a higher-than-predicted 4.2%.) All those new jobs should be a reassuring sign – but the news was dwarfed by worries about tariffs, so stocks continued to slide.

🇪🇺 Europe

• European prices were 2.2% higher in March than the same time last year. That’s the lowest inflation reading since November and slightly below expectations of 2.3%. Services inflation, meanwhile, dropped to a 33-month low. And what’s more, core inflation – which leaves out especially changeable food and energy prices – slipped to 2.4%, the lowest since January 2022. The bloc will be rocked by tariffs, of course, but the effect could be slightly mitigated by recent interest rate cuts and fiscal support from the region’s governments.

• France and Germany seem set to retaliate strongly against US tariff measures, in an attempt to improve Europe’s negotiating position.