The S&P 500 Starts Strong, Earnings and Fed Policy in Focus

The S&P 500 (^GSPC) has recorded its best start to a presidency since Ronald Reagan's first week in 1985. However, the upcoming week will present a barrage of news that could challenge this rally.

Earnings Season

Over 100 S&P 500 companies, including tech giants Meta (META), Microsoft (MSFT), Apple (AAPL), and Tesla (TSLA), are set to report earnings this week, with Wednesday being the busiest day. Starbucks (SBUX), Exxon (XOM), and Chevron (CVX) are also expected to disclose their results.

Federal Reserve Decision

On Wednesday afternoon, the Federal Reserve will announce its monetary policy decision. The central bank is widely anticipated to maintain interest rates unchanged, but investors will closely monitor Chair Jay Powell's comments on the outlook for 2025.

Trump's Market Impact

President Trump's policy announcements have significantly influenced the stock market in his first week in office. The diminished fear of universal tariffs and a substantial AI investment have boosted investor sentiment. Oracle (ORCL), Microsoft, and Nvidia (NVDA) benefited from the AI-related news.

Economic Data

Several key economic indicators will be released throughout the week, including the first estimate of fourth-quarter GDP on Thursday and the Fed's preferred inflation gauge, the Personal Consumption Expenditures index, on Friday.

Big Tech Earnings

The "Magnificent Seven" tech stocks, including the aforementioned companies, are expected to drive a significant portion of S&P 500 earnings growth in the fourth quarter. However, analysts anticipate a narrowing of the earnings gap between these tech giants and the rest of the market as the year progresses.

Weekly Calendar

Monday:
* Economic data: Chicago Fed National Activity Index, New home sales
* Earnings: AT&T (T), Nucor (NUE), SoFi (SOFI), Western Alliance Bancorporation (WAL)

Tuesday:
* Economic data: Durable goods orders, FHFA house price index, S&P CoreLogic Case-Shiller home prices, Conference Board Consumer Confidence, Richmond Fed manufacturing index
* Earnings: Boeing (BA), General Motors (GM), JetBlue (JBLU), Lockheed Martin (LMT), Logitech (LOGI), Royal Caribbean Cruises (RCL), SAP (SAP), Starbucks (SBUX), Sysco (SYY)

Wednesday:
* Economic data: MBA Mortgage Applications
* FOMC rate decision
* Earnings: Tesla (TSLA), Meta (META), Microsoft (MSFT), ADP (ADP), ASML (ASML), General Dynamics (GD), IBM (IBM), Nasdaq (NDAQ), Progressive (PGR), ServiceNow (NOW), T-Mobile (TMUS), V.F. Corporation (VFC)

Thursday:
* Economic data: Fourth quarter GDP, Personal consumption, Core PCE, Initial jobless claims
* Earnings: Apple (AAPL), Blackstone (BX), Caterpillar (CAT), Comcast (CMCSA), Dow (DOW), Deckers Outdoors (DECK), Intel (INTC), Mastercard (MA), Mobileye (MBLY), Southwest Airlines (LUV), UPS (UPS), United States Steel (X), Visa (V)

Friday:
* Economic data: Core PCE index, Employment cost index
* Earnings: Charter Communications (CHTR), Chevron (CVX), Colgate (CL), Exxon Mobil (XOM), Phillips 66 (PSX)