Tech Earnings and Trade Tensions Weigh on Market as Big Tech Reports Loom

The U.S. stock market entered April 30, 2025, in a holding pattern, with futures for the Dow Jones Industrial Average flat, the S&P 500 dipping 0.2%, and Nasdaq futures down 0.4%. Investors remained cautious ahead of a deluge of Big Tech earnings and a critical U.S. GDP report, all while navigating the choppy waters of President Trump’s evolving trade policies. With Microsoft and Meta set to report after the close, the market’s fate hinges on whether Big Tech can weather escalating tariff pressures—and whether Washington’s trade rhetoric translates into tangible deals.

Trade Policy Uncertainty Clouds the Outlook

President Trump’s mixed signals on trade dominated pre-market chatter. His decision to scale back auto tariffs brought some relief to automakers like General Motors, but his insistence that China “deserves” its current tariff burden kept cross-Pacific tensions simmering. Commerce Secretary Howard Lutnick’s claim of nearing a “trade deal with an unnamed country” added intrigue, though Barclays economists dismissed it as “mostly rhetorical.”

The market’s skepticism is reflected in corporate behavior: General Motors delayed its earnings call until May, citing tariff uncertainty, while Morgan Stanley warned that a “patchwork” of bilateral deals with India and Japan won’t stabilize markets without broader tariff relief. “Sector carve-outs during the 90-day tariff pause may provide temporary respite, but the Fed’s inflation fight and global supply chain strains remain unresolved,” noted UBS analysts.

Tech Earnings Preview: Can AI and Tariffs Coexist?

The Big Tech earnings season kicks off in earnest this week, with Microsoft and Meta releasing results on April 30. Both companies face scrutiny over their ability to monetize AI innovations amid rising costs from tariffs. Analysts estimate Microsoft’s cloud division, Azure, grew 18% in Q1 2025, but its enterprise clients may be delaying spending until trade policies stabilize. Meta, meanwhile, hopes its AI-driven ad platform can offset headwinds in hardware supply chains.

The heavy lifting comes Thursday, when Apple and Amazon report. Apple’s iPhone sales could suffer if Chinese consumers—already facing retaliatory tariffs—cut back on premium gadgets. Amazon’s guidance on Prime membership retention and third-party seller costs will also draw scrutiny, as its logistics network grapples with $2,000-per-ton steel tariffs.

Economic Data Watch: GDP and Inflation Under the Microscope

The first-quarter GDP report and the PCE inflation gauge, both due April 30, will test whether the U.S. economy can avoid recession amid tightening trade conditions. Economists project 1.2% GDP growth, down from 2.6% in Q4 2024, with the PCE expected to edge up to 3.4%. A weaker-than-expected reading could amplify calls for the Fed to pause its rate hikes, though Chair Bessent has stressed the need to “balance growth and inflation.”

The S&P 500’s six-day winning streak—a longest since July 2024—has investors divided. Bulls point to resilient consumer spending and AI-driven innovation, while bears cite the index’s 10% decline from its February peak. “The market is in a holding pattern until we see concrete progress on trade deals or a tariff rollback,” said LPL Financial’s chief strategist, Jim Paulsen.

Conclusion: Risks Remain Elevated, but Tech Could Steer Markets

With the S&P 500 down 1% for April and Nasdaq eking out a 0.4% gain, the path forward is fraught. Morgan Stanley’s warning about “sector carve-outs” underscores the fragility of current trade optimism, while UBS’s analysis suggests only targeted tariff relief—not broad deals—will stabilize earnings.

Investors should prioritize companies with diversified supply chains and exposure to AI-driven growth. Microsoft and Amazon, with their scale and innovation pipelines, may outperform peers, but even they face execution risks. On the macro front, a GDP miss below 1% could send the S&P 500 toward U.S. Bank’s 4,800 target—a 12% drop from current levels.

In the end, the market’s fate rests on whether Big Tech can turn AI’s promise into profit—and whether Washington’s trade theater finally delivers substance. Until then, caution—and a dose of skepticism—remains the investor’s best strategy.