Earnings Season Overshadowed by Interest Rate and Tariff Concerns
The recent market volatility, termed the “tariff trade,” has affected investor sentiment amid ongoing tariff discussions. Key points include:
- 25% tariffs on steel and aluminum are expected to commence next month.
- Reciprocal tariffs against various countries are under consideration.
- Big Tech stocks are recovering from post-earnings dips; however, the S&P 500 outperforms them.
- Amazon reported a 37% profit margin for Q4 2024, yet shares fell over 4% post-report.
- Microsoft experienced its worst day since 2022 despite exceeding earnings expectations.
- Google shares dropped more than 8% after missing Q4 revenue targets.
- Analyst Tom Essaye indicates that sustained economic conditions in the “Goldilocks” range could support market resilience.
- A prolonged pause from the Fed may pose risks to the market.