On Monday, U.S. stock indices experienced a decline, reversing the positive trend observed the previous week. The “Magnificent Seven” tech stocks all saw declines, with investors receiving mixed messages about potential trade deals they had been hoping for.
U.S. stocks managed to rebound late in the day, closing slightly higher. The Dow Jones increased by 106 points, while the S&P 500 remained nearly flat, rising by 0.14%. The tech-heavy Nasdaq Composite also recovered from earlier lows but ended slightly down, decreasing by 0.01%.
Earlier in the day, indices fell as investors pulled back from some of the prominent tech stocks. Companies such as Apple, Meta, Microsoft, and Amazon are set to report earnings this week, their first since President Donald Trump announced his tariff policy in early April. Investors are preparing for potentially unfavorable news, especially concerning Apple, given its reliance on products manufactured in China, which has been significantly affected by the tariffs.
The large-cap tech stocks have a substantial influence on the broader market. Previously, they had propelled U.S. stocks to consecutive years of excellent returns. However, some uncertainty on Monday led to an intraday slump. During the trading session, some of the Magnificent Seven stocks recovered from earlier losses. Meta increased by 0.5%, Apple rose by 0.4%, and Tesla gained 0.3%, while Microsoft ended just slightly below its starting point for the day, closing 0.2% lower.
Conversely, other significant tech stocks closed the day in the red, with Amazon’s share price dropping by 0.7% and Nvidia falling by 2.1%.
The performance on Monday marked a reversal from the previous week, during which markets had rebounded following the impact of President Trump’s tariff announcement. This week, investors are closely watching developments from the White House on trade deals as indicators of potential economic stabilization.
Investors received limited information about possible trade agreements between the U.S. and other nations. The absence of progress raises concerns about a continuing tariff-induced economic downturn, with fears of declining foreign trade.
Barclays economist Jason Millar expressed skepticism, noting, “This is mostly talk for now, and we remain skeptical that there will be enough concrete momentum in trade discussions to sidestep a U.S. recession.”
Mixed messages from government officials on trade deal progress added to investor uncertainty. Treasury Secretary Scott Bessent mentioned that the U.S. was in talks with 18 countries over trade deals. Yet, President Trump claimed over the weekend to have made 200 deals, which Bessent later clarified likely referred to “sub-deals within negotiations.” Bessent indicated that a deal with India might be among the first to be signed.
The White House has also given conflicting views on its position towards China, with whom tensions have escalated significantly. Reciprocal tariffs exceeding 100% have substantially halted trade between the two countries. Bessent hinted at discussions with Chinese officials, implying many “touch points” between the two economies. However, while Trump claimed to have spoken with Chinese President Xi Jinping, the Chinese foreign ministry denied any recent discussions between the leaders.
Investors are observing whether the U.S. and China can continue finding common ground to foster market rallies. Chris Larkin, E*TRADE managing director, stated, “Investors may need to see the White House follow through on last week’s dovish pivot toward trade with China.”
Later this week, attention will focus on several key economic indicators, including the first quarter U.S. GDP, the ISM manufacturing survey, and the April jobs report, which will provide insights into the impact of Trump’s tariffs on the economy.
This story was originally featured on Fortune.com.
