US Stock Futures Find Calm Amid Powell-Trump Truce, but Risks Linger

The U.S. stock market futures edged higher on April 23, 2025, as President Donald Trump’s reassurance that he had “no intention” of firing Federal Reserve Chair Jerome Powell eased fears of political interference in monetary policy. This followed days of volatility triggered by Trump’s earlier threats to oust Powell, which had sent gold prices soaring and equity markets tumbling. While the truce between the White House and the Fed provided immediate relief, investors remain on edge ahead of a flood of corporate earnings reports and key economic data releases.

The Powell-Trump Truce: Markets Breathe Sigh of Relief

After days of fiery rhetoric—including Trump’s April 18 social media post declaring Powell’s “termination cannot come fast enough”—the president backtracked during an Oval Office press briefing. “I have no plans to fire him,” Trump insisted, framing his criticism as a call for the Fed to act “early or on time” rather than “late.” The clarification stabilized markets, with S&P 500 futures rebounding from intraday lows.

However, tensions persist. Trump doubled down on his stance that inflation is “virtually nonexistent” and that interest rates should fall immediately, despite the Fed’s caution. Meanwhile, Powell’s warnings about tariffs exacerbating inflation and slowing growth loom large. The Federal Reserve’s independence remains under scrutiny, but for now, the market is focused on the next catalyst: earnings season.

Earnings Season: Winners and Losers in Focus

Over 120 S&P 500 companies are reporting earnings this week, with 72% of results so far beating estimates, according to FactSet. Key highlights include:

1. Philip Morris International (PM):
   Expected to report EPS of $1.61, a 7.3% year-over-year rise. Analysts note its consistent outperformance, with a 2.65% beat in Q4 2024. A P/E ratio of 22.43 (vs. industry average 11.80) signals strong growth expectations.
   

2. GE Vernova (GEV):
   Anticipates a 209.76% surge in EPS to $0.45, driven by its pivot to renewable energy. Its P/E ratio of 49.00 reflects investor optimism.
   

3. Boeing (BA):
   Facing a 36.28% EPS decline to -$1.54 amid production challenges and weak demand. Its negative P/E ratio (-68.68) underscores deepening concerns.
   

Economic Data: The Next Crossroads

Investors will parse three critical reports on April 23:
- S&P PMI Composite (April): Preliminary data at 9:45 a.m. ET could signal whether business activity is stabilizing or weakening.
- New Home Sales (April): Released at 10:00 a.m., this will test housing sector resilience amid rising mortgage rates.
- Fed Beige Book: Issued at 2:00 p.m., it will summarize regional economic trends, potentially influencing Fed policy expectations.

Sector Spotlight: Energy, Tech, and Healthcare Lead

Analysts highlight opportunities in sectors with strong earnings momentum:
- Energy: NextEra Energy (NEE) (+6.59% EPS growth) and General Dynamics (GD) (+20.49% in defense contracting) are poised to outperform.
- Tech/Industrials: Amphenol (APH) (+30% EPS growth) and CME Group (CME) (+10.40%) reflect resilience in infrastructure and fintech.
- Healthcare: Boston Scientific (BSX) (+19.64% EPS growth) and Thermo Fisher Scientific (TMO) (+0.20% decline but consistent beats) benefit from rising healthcare spending.

Conversely, telecom (AT&T) and aerospace (Boeing) face headwinds, with AT&T’s EPS forecast of $0.52 (-5.45%) underscoring sector struggles.

Risks and Roadblocks Ahead

• Earnings Disappointments: Companies like UnitedHealth Group, which cut guidance on April 22, could spark renewed sell-offs.
• Trade Tariffs: While Trump claims tariffs are “winning,” Powell’s warnings about their inflationary impact remain unresolved.
• Fed Policy Uncertainty: Analysts like Marko Papic (BCA Research) see the S&P 500 testing 4,800 before a rebound, while Jay Woods (Freedom Capital) warns of hurdles at 5,130.

Conclusion: A Delicate Balance Between Hope and Reality

The market’s April 23 rebound reflects a temporary truce in the Fed-Trump feud, but sustained gains hinge on earnings execution and economic data. With 72% of companies beating estimates so far, the path forward is littered with both optimism and risks.

• Optimism Drivers:
• GE Vernova’s 209% EPS surge and NextEra’s 6.6% growth underscore the transition to clean energy and infrastructure spending.

• The S&P 500’s 5,000 level acts as a critical support, with Wells Fargo’s Christopher Harvey arguing a “Fed put” could limit downside.

• Key Risks:

• A 5% decline in Boeing’s EPS and AT&T’s 5% miss highlight vulnerabilities in sectors tied to global demand.
• Weak PMI data or a dovish Beige Book could reignite fears of recession.

In short, investors should focus on high-margin, earnings-driven sectors like energy and healthcare while maintaining caution on trade-exposed industries. The market’s next move will be decided not just by corporate results but by whether the Fed-Trump truce holds—and whether the economy can withstand the political storm.