Big Tech Selloff Rocks Stocks Amid Trade War Uncertainty and Earnings Watch

A wave of selling pressure in major technology stocks cast a shadow over the market at the start of a pivotal week, where a confluence of corporate earnings reports and crucial economic data loom large. Investors are keenly awaiting insights into how President Donald Trump’s ongoing trade war is impacting corporate bottom lines and the broader economic landscape.

The S&P 500 Index snapped its longest winning streak since January, while the tech-heavy Nasdaq 100 Index experienced a notable decline of approximately 1%. This week’s earnings releases from tech giants Microsoft, Apple, Meta Platforms, and Amazon will be closely scrutinized for any signals of how tariff developments are affecting their performance and future outlook. Adding to the negative sentiment was news that China’s Huawei Technologies is poised to test a new chip designed to rival those of Nvidia, further unsettling investors in the technology sector. In the fixed-income market, short-term Treasury securities showed relative strength, while the US dollar weakened.

Monday’s trading session saw broad declines, primarily driven by the retreat in shares of prominent Big Tech companies scheduled to report their earnings this week. The lack of tangible progress in trade negotiations also contributed to the market’s cautious mood. The S&P 500 fell by 0.6%, and the Nasdaq Composite registered a similar drop of around 1%. The Dow Jones Industrial Average also edged lower, declining by 77 points, or 0.2%.

The S&P 500’s downward trajectory was significantly influenced by pullbacks in the “Magnificent Seven” stocks, all of which are slated to release their financial results in the coming days. Amazon shares fell by over 1%, while Microsoft and Meta Platforms saw declines of 0.6% and 0.2%, respectively. Nvidia, a leader in artificial intelligence chips, and electric vehicle manufacturer Tesla also contributed to the index’s losses, plummeting by more than 3% and nearly 2%.

While earnings results for the previous quarter have generally been positive, with 73% of reporting companies exceeding analysts’ estimates according to FactSet data, this figure is slightly below the five-year average of 77%. Notably, Wall Street is tempering its expectations for the second quarter and the full year, as companies express uncertainty in their guidance due to the ongoing impact of President Trump’s tariffs.

Adding to the ambiguity surrounding trade, Treasury Secretary Scott Bessent offered little clarity on Monday regarding the potential for a trade agreement with China. He emphasized that the responsibility for de-escalation lay with Beijing, citing the significant trade imbalance between the two nations. However, Bessent offered a more optimistic outlook on other trade fronts, suggesting that a deal with India could be among the first to materialize.

“I believe that it’s up to China to de-escalate, because they sell five times more to us than we sell to them, and so these 120%, 145% tariffs are unsustainable,” Bessent stated in an interview with CNBC.

His remarks followed President Trump’s assertion last week that discussions with China were indeed underway, contradicting China’s claims of no active trade talks.

Barclays economist Jonathan Millar noted in a recent analysis, “Recent days have brought indications of some easing in U.S.-China trade tensions, with both sides chipping away at the unsustainable tariff rates implemented earlier this month and the U.S. signaling some intent to de-escalate. This is mostly talk, for now, and we remain skeptical that there will be enough concrete momentum in trade discussions to sidestep a U.S. recession.”

As April draws to a close, the stock market has experienced considerable volatility, marked by wide trading swings following President Trump’s initial unveiling of sweeping tariff plans and subsequent partial rollbacks. So far in April, the S&P 500 has declined by more than 2% and is currently trading over 10% below its 52-week high reached in late February. The Dow Jones Industrial Average is on track for a loss of nearly 5% in April, while the Nasdaq Composite is down by almost 1%. The S&P 500 briefly entered bear market territory on April 7th before staging a recovery, but the index has since struggled to break through key resistance levels.

This week will also bring a series of crucial economic reports, including multiple indicators on the labor market, as well as key data on inflation and economic growth. The highlight of the week will be Friday’s nonfarm payrolls release. Additionally, the first-quarter gross domestic product (GDP) figure and the Federal Reserve’s preferred inflation gauge are scheduled for release on Wednesday, providing further insights into the health of the US economy amidst the ongoing trade tensions.