Investing.com - Alphabet and Tesla (NASDAQ:TSLA) are set to kick off earnings from the all-important "Magnificent Seven" tech names, as Corporate America’s latest quarterly reporting season heats up. New economic data could provide an early glimpse into how U.S. President Donald Trump’s back-and-forth tariff agenda is impacting businesses and the wider economy. Renewed worries over the independence of the Federal Reserve will also likely be in focus after Trump attacked Chair Jerome Powell last week.
1. Alphabet (NASDAQ:GOOGL), Tesla to report
Google-parent Alphabet and Elon Musk-helmed electric carmaker Tesla are due to report quarterly results this week, becoming the first of the so-called "Magnificent Seven" mega-cap tech companies to unveil their latest earnings.
Investors will be keen to see if the figures and potential guidance provide some relief for markets still reeling from the massive ructions in the recent weeks sparked by U.S. President Donald Trump’s tariff policies. In recent years, the Magnificent Seven stocks have largely been the driving force behind U.S. equity market gains, although shares in these businesses have slipped so far this year.
The VIX volatility index, a gauge of investor fears, has dipped to around 30 after cresting at roughly 60 during the levy-fueled market ructions earlier this month. The long-term median level is at around 17.6, LSEG Datastream figures cited by Reuters showed.
For Alphabet in particular, eyes will likely be trained yet again on its spending plans in the wake of rising doubts earlier in 2025 around huge investments in artificial intelligence. A judge’s decision last week that Google has an illegal monopoly over online advertising technology has added to a debate around a possible breakup of its ad products unit by U.S. regulators as well.
Musk’s close proximity to Trump -- and a backlash to his efforts to slash the size of the federal government -- may be a central focus for analysts. Media reports suggest that Tesla has been also grappling with a delay to the cheaper version of its Model Y offering, which was to supposed to cater to inflation-hit consumers, and dialed-back Cybertruck production due to tepid demand for the product.
2. Earnings season gathers pace
Apart from these tech giants, the quarterly parade of corporate earnings will pick up the pace in the coming days.
Boeing (NYSE:BA) is due to announce its results following reports that one of the planemaker’s jets bound for a Chinese airline was sent back to the U.S. in an apparent response to a tit-for-tat trade war between Beijing and Washington. China has ordered its airlines not to take any more deliveries from Boeing, posing a fresh challenge for a company trying to bounce back from a challenging year marked by safety concerns, supply chain snafus, and a damaging labor strike.
Chipmaker Intel (NASDAQ:INTC), drug manufacturer Merck (NSE:PROR), tech firm IBM (NYSE:IBM), and Pampers-parent Procter & Gamble (NYSE:PG) are also on the earnings docket this week, as well as American Airlines (NASDAQ:AAL). The carrier’s rival United Airlines last week provided a two-pronged outlook for the year, including one that warned of a recession causing a deep hit to revenue and profit.
U.S. profit growth expectations have largely waned as investors brace themselves for the possible impact from Trump’s tariffs on economic activity. S&P 500 earnings are now seen increasing by 9.2% in 2025, down from a prior projection of 14% at the beginning of the year, according to LSEG IBES data cited by Reuters.
3. April PMIs due
On the economic calendar, markets will have the chance to parse through the flash U.S. purchasing managers’ index on Wednesday.
The numbers will be among the first pieces of perceived "hard" economic data released since Trump announced -- and then partially delayed -- punishing tariffs on several countries around the world, analysts at Vital Knowledge said in a note to clients.
Economists have flagged that the duties could drive up inflationary pressures and weigh on growth, while several companies have said the measures have made it more difficult to map out business plans.
A final reading of the University of Michigan’s key sentiment report is also scheduled to be released on Friday. The initial survey showed that consumer sentiment deteriorated heavily in April, while 12-month inflation expectations jumped their highest mark since 1981.
4. Fed independence in focus
Meanwhile, the Federal Reserve’s closely-watched "Beige Book" is set to be announced on Wednesday.
The document provides a snapshot of the state of the economy in the weeks leading up to a Fed policy meeting.
At its last gathering in March, the Fed left its benchmark interest rate unchanged at 4.25% to 4.50%, as the central bank assessed inflationary risks and signs that the U.S. economy remains in a relatively solid position despite the pressure exerted by the uncertainty around Trump’s tariffs.
Fed Chair Jerome Powell said last week that policymakers are "well positioned" to wait for greater clarity around the ultimate effects of the levies before rolling out any further rate adjustments. Powell added that officials may be "moving away" from their typical goals of keeping price growth at 2% and maintaining maximum employment for at least this year as the White House’s trade policy ripples through the wider economy.
The Beige Book will come as Trump has revived threats to oust Powell from his role, accusing him of moving to slowly to bring down interest rates. However, the New York Times (NYSE:NYT) has reported that the president is aware that the action may further shake global financial markets.
5. IMF/World Bank Spring Meetings
The International Monetary Fund and World Bank Spring meetings take place in Washington this week, with Trump’s erratic tariff policy likely to be the central theme of discussions.
As the White House attempts to upend longstanding U.S. relationships with its trading partners, finance ministers and central bank governors from around the world will likely be racing to capture time with the Trump administration.
Trump officials have said they are aiming to sign dozens of deals during the ongoing 90-day pause to the elevated reciprocal duties on a host of nations, although experts have cast doubt over whether this will be achievable.
One of the biggest items on the schedule for the events is the IMF’s global economic outlook on Tuesday. IMF Managing Director Kristalina Georgieva has previously warned that the tariffs pose a "significant risk" to worldwide economic output and has asked Washington and other countries to work to calm trade tensions.