Stock market rally promoted by commercial conversations and key profits this week

Last week, US actions increased significantly, with the S&P 500 increasing 5.3%, the Nasdaq compound jumping 7.2%and the Dow Jones industrial average won approximately 3.4%. Both the S&P 500 and the NASDAQ have now recovered completely from the recession related to the rate observed in early April, which places them comfortably in positive territory during the year.

Commercial headlines will continue to dominate the market narrative this week, in the middle of a light economic calendar. Key reports will include updates on manufacturing activity and weekly unemployment claims, but otherwise few important versions of data are expected.

With most of the companies that reported profits from the first quarter, the market approach will be reduced in the results of key players such as Palo Alto Networks, Target, Home Depot and Workday.

Commercial War

The current commercial dispute remains the main market history. The announcement of last week of a 90 -day tariff suspension with China caused a demonstration between shares, which led to some Wall Street strategists to increase their perspectives in the S&P 500. President Trump also indicated that the rates of rates for other commercial partners will be announced in the coming weeks.

Tom Lee, Chief of Research at Fundstrat, is still optimistic. In a recent client note that defends its end of the end of the year S&P 500 of 6,500, he said that if formal tariff agreements are soon reached, the actions could see more profits. However, many experts emphasize that the rate of the rate is temporary and that the negotiations are ongoing, leaving some political uncertainty.

Victoria Fernández, main strategist of the CrossMark Global Investments market, advised investors to remain cautious until the company’s trade agreements are ensured, not only with China but also with Europe, where conversations remain in the background.

Federal Reserve and Interest Rate

Economists have generally reduced recession risks during the past week, backed by the rate of the rate. This change has influenced the expectations of the Federal Reserve interest rate decisions. Market probabilities now favor a rate reduction in July instead of June, according to the CME Fedwatch tool. Bloomberg’s data show that the market has a price on two cutting -foothold fees for the whole year, below three early cuts last week.

Next week will have nine speeches from Federal Reserve officials, but analysts such as Aditya Bhave de Bank of America predict that these conversations will probably reinforce the waiting and view of the Fed. Bhave expects that Fed officials stress patience and caution due to continuous uncertainties, particularly around commercial policy.

Bhave also has a opposite vision that Fed cannot reduce rates throughout this year unless there is clear evidence of a significant deterioration of the labor market or inflation that decreases beyond the tariff effects, the scenarios that believe that they are unlikely in the short term.

Despite the recoil in the expectations for reducing rates, the market has remained resistant as investors continue to pour money into risk assets in the midst of a brighter perspective for economic growth.

The mixed role of great technological actions

After promoting the profits of the S&P 500 for two consecutive years, the “magnificent seven” technological giants: Apple, Alphabet, Microsoft, Amazon, Met quarter of the brains during the trimester of the ses and the show during the quarter during the brains of the brains during the trimester of the brains during the quarter. In fact, excluding these actions, the index would increase approximately 2% so far this year.

However, the image has changed since May. These seven technological actions have generated 60% of the profits of the S&P 500 in the current month, led by strong manifestations in Nvidia, Microsoft and Tesla. Tesla and Nvidia have increased approximately 30% or more in the last month, while Microsoft has gained approximately 20%.

In response to this technological rebound, Goldman Sachs lifted its S&P 500 goal of the year from 5,900 to 6,100, citing optimism about the growth of profits driven by AI and attractive valuations in the sector.

Economic and profits weekly calendar

Monday

• Economic data: Leader index, April (expected -0.8%)

• Earnings: Trip.com (Tcom)

Tuesday

• Economic data: Philadelphia fed with non -manufacturing activity, May

• Earnings: Home Depot (HD), Palo Alto Networks (PANW), Toll Brothers (Tol)

Wednesday

• Economic data: MBA mortgage requests (May 16)

• Earnings: Baidu (IDBU), Canada Goose (Goos), Snowflake (Snow), Target (TGT), TJX Companies (TJX), Urban Outfitters (URBN), VF Corporation (VFC), Zoom (ZM)

Thursday

• Economic data: National Activity Index of the Chicago Fed, initial unemployment claims, continuous claims, S&P Global Us Manufacturing and Services PMI, sales of existing housing, manufacturing activity of Kansas City Fed

• Earnings: Advance Auto Parts (AAP), Autodesk (ADSK), BJ’s (BJ), Deckers (Deck), Intuit (INTU), Ralph Lauren (RL), Ross Stores (ROST), TD Bank (TD), Workday (Wday)

Friday

• Economic data: New houses for sale and construction of housing, April

• Earnings: No important reports

This week, investors will closely monitor trade negotiations and key profit reports, as the uncertainties of continuous policy and the caution posture of the Federal Reserve continue to shape the market behavior.

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