US stock markets closed lower on Monday as investor caution grew ahead of major Big Tech earnings reports and amid lingering uncertainty around US-China trade negotiations.
While April has been a volatile month for Wall Street, concerns over President Donald Trump’s new tariffs and mixed corporate guidance kept markets on the defensive to start the final trading week of the month.
Key indices
The S&P 500 slipped 0.2%, pressured by weakness in heavyweight technology stocks, while the Nasdaq Composite fell 0.5%.
The Dow Jones Industrial Average ended near the flatline, struggling for direction throughout the session.
A retreat in shares of the so-called “Magnificent Seven” — the tech giants that have been key drivers of the recent bull market — weighed heavily on sentiment.
Amazon dropped about 1%, Microsoft edged down 0.1%, while Nvidia, Alphabet, and Tesla tumbled by more than 2%, 1%, and 0.5%, respectively.
The pullback comes just days before these companies are set to report their highly anticipated quarterly results, with investors bracing for what could be pivotal updates amid growing economic uncertainty.
According to FactSet data, about 73% of S&P 500 companies that have reported so far have beaten analysts’ earnings estimates, slightly below the five-year average of 77%.
Despite the solid showing for the prior quarter, Wall Street remains cautious.
Many companies are issuing uncertain guidance, citing the impact of new tariffs imposed by the Trump administration, leading analysts to trim forecasts for the second quarter and the rest of 2025.
US-China trade war
Adding to the cautious mood, Treasury Secretary Scott Bessent on Monday provided little clarity on the status of US-China trade talks.
Speaking on CNBC’s “Squawk Box,” Bessent said the United States is not responsible for the current trade impasse, stressing that China must move to de-escalate tensions.
However, he also suggested that other trade agreements, particularly with India, are progressing and could materialize soon.
“I believe that it’s up to China to de-escalate, because they sell five times more to us than we sell to them, and so these 120%, 145% tariffs are unsustainable,” Bessent said.
His remarks follow President Trump’s comments last week that discussions with China are ongoing, contradicting earlier claims from Beijing that talks had stalled.
With just two trading days left in April, the S&P 500 is down nearly 2% for the month, trading about 10% below its 52-week high set in late February.
The Dow Jones is on pace for a monthly loss of over 4%, while the Nasdaq remains roughly flat.
After briefly dipping into bear market territory earlier this month, the S&P 500 has struggled to reclaim key technical resistance levels.
Investors are now closely watching a busy economic calendar.
Wednesday will bring first-quarter GDP data and the Federal Reserve’s preferred inflation gauge, while Friday’s nonfarm payrolls report will offer critical insight into the labor market’s health.
Meanwhile, earnings from megacap tech companies could dictate broader market sentiment.
Deutsche Bank’s Jim Reid noted that the upcoming results from Meta, Microsoft, Apple, and Amazon could “go a long way to dictating the tone of the week.”
Despite the broader market weakness, three stocks in the S&P 500 — Netflix, Take-Two Interactive, and VeriSign — hit fresh all-time highs on Monday, reflecting continued pockets of strength even as broader headwinds persist.
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