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The “tariff trade,” or the market volatility we’ve seen the past couple of weeks as investors evaluate tariff risks, has overshadowed the tail end of earnings season.
But many analysts still think US equities have room to go higher.
President Trump’s threats have been delayed, not canceled. 25% tariffs on steel and aluminum tariffs are slated to start next month, and reciprocal tariffs against a range of countries are still being designed, so the news cycle — and market — are likely to take a break from focusing on duties.
In the meantime, Big Tech stocks are just starting to recover from some post-earnings dips, but the S&P 500 is still outperforming the Magnificent Seven.
Amazon’s web services business reported a 37% profit margin in Q4 2024 — an impressive feat, but investors weren’t sold. Shares fell more than 4% following the company’s report.
Microsoft was a similar story. Shares had their worst day since 2022 after execs reported Q4 earnings, even though figures for earnings per share and revenue came in higher than expected.
Google shares were down more than 8% after Alphabet missed on Q4 revenue.
Still, Sevens Report Research founder Tom Essaye says that as long as economic data continues to stay in the “Goldilocks” range, the market should prove resilient. Should the Fed signal that this pause is likely to continue for a long while, we could be in trouble.
