S&P 500: Tesla Earnings in Focus After Strong Session for Apple and 3M

Energy stocks rose 1.76% as oil prices stabilized, while financials added 2.28% on improving risk sentiment. Industrials gained 0.85%, helped by 3M’s 6.9% surge after it beat Q1 earnings estimates. However, RTX dropped 8.9% after warning of an $850 million tariff hit, and Northrop Grumman plunged 11.75% following a sharp profit decline.

Federal Reserve Tensions and Economic Forecasts Weigh on Market Confidence

While equities bounced, underlying uncertainty persists. The IMF cut its U.S. growth outlook to 1.8% for 2025, citing policy risks. Citigroup now sees a 40%–45% chance of recession, reinforcing the cautious tone among institutional investors.

Trump’s repeated criticisms of Powell, including calling him “Mr. Too Late” and suggesting termination, have rattled confidence in Fed autonomy. Legal experts say Powell cannot be removed, but the political pressure alone is disrupting expectations for stable monetary policy. Traders are also wary of how long the Fed can resist external influence while inflation remains above target.

Traders Should Brace for Continued Volatility Ahead of Fed Remarks and Tech Earnings

The short-term outlook points to continued volatility. With more Fed commentary due this week, traders are on alert for any signals about future rate cuts or changes in policy stance. Markets remain reactive to both economic headlines and political developments, making risk management essential.

Earnings from major tech players, starting with Tesla, will offer key insight into how the largest stocks are handling slower growth and global trade friction. Unless there’s a material breakthrough in U.S.-China talks or clarity from the Fed, upside in equities may be capped and prone to sharp pullbacks.