The stock market remains at the mercy of tariffs.
Shifting narratives around policy from the Trump administration weighed on stocks as the water muddied following the 90-day pause on reciprocal tariffs announced on April 9.
Last week, the S&P 500 ( ^GSPC ) fell about 1.5%, while the Nasdaq Composite ( ^IXIC ) and Dow Jones Industrial Average ( ^DJI ) each shed roughly 2.6% across four days of trading.
In the week ahead, President Trump's policies will remain in focus while a slew of S&P 500 companies are expected to report quarterly results.
Results from Alphabet ( GOOGL , GOOG ), Tesla ( TSLA ), Chipotle ( CMG ), Boeing ( BA ), and Verizon ( VZ ) are set to lead a week in which quarterly reports from more than 120 S&P 500 companies are expected for release.
A quieter week on the economic data front is expected, with updates on activity in the manufacturing and services sectors, as well as consumer sentiment, headlining the calendar.
Uncertainty driving markets
Trump's policies remain at the forefront of the market narrative.
On Wednesday , markets sold off sharply as investors began to see the costs Trump's tariffs will have for major companies and the challenges these policies may present for the broader US economic outlook.
Read more: What Trump's tariffs mean for the economy and your wallet
The selling was kicked off by Nvidia ( NVDA ), which revealed late Tuesday night that new restrictions from the US government on its chip exports to China would result in $5.5 billion in charges.
The downside action only intensified when Federal Reserve Chair Jerome Powell said in a speech that the central bank would wait for "greater clarity" before considering any interest rate adjustments.
"What this comes down to is this continued level of uncertainty in the markets," Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs, told Yahoo Finance.
In the near term, strategists aren't confident the path ahead will become more clear. Citi's head of US equity trading strategy, Stuart Kaiser, told Yahoo Finance that the next few weeks will be crucial for the market's direction through the summer months.
"We need to see some good news on the tariff front, especially with our key trade partners," Kaiser said.
"If you get that, I think the market will say, OK, this is a playbook for how this can evolve over the next three months," he added. "If you don't get that, I think the market's going to have to really start to increase the recession odds on the view that these tariffs are going to be higher and longer implemented than they might have hoped."
Earnings scorecard
Just 12% of S&P 500 companies have reported first quarter earnings thus far, but the early sampling has been weaker than average.
Data from FactSet shows 71% of S&P 500 companies have reported earnings per share above Wall Street's estimates, below the five-year average of 77%. And those companies are beating projections by less than usual too.
In the early stages of earnings season, companies are beating analyst expectations by 6.1%, lower than the five-year average of an 8.8% beat.
With more than 20% of the S&P 500 reporting in the week ahead, investors will get a far better sense of how these trends hold, improve, or further deteriorate.
"Ultimately, the importance of the Q1 reporting period will be in the information it provides as to what is priced into single stocks as C-suites start providing some tariff context," Citi US equity strategist Scott Chronert wrote in a note to clients on Thursday.
Alphabet and Tesla will kick off the reporting period for the "Magnificent Seven" tech stocks that helped catapult the market higher in 2023 and 2024.
That trade has soured so far this year. Alphabet shares are down nearly 20% to start 2025, while Tesla is off more than 40%.
The 'downside' risk in markets
While the recent market action has been choppy, the S&P 500 is up about 6% from its lowest close of the year on April 8.
Still, many Wall Street strategists don't have conviction that the next near-term move for markets will be higher.
In a note to clients on Thursday, Truist co-chief investment officer Keith Lerner wrote he was downgrading his view on US equities from Neutral to "less attractive," essentially a recommendation that investors consider underweighting their allocation to US stocks relative to their typical allocation.
Lerner noted that a weakening economic growth outlook is one key part of the murkier forecast for stocks. "As we look at a combination of historical, fundamental, and technical analysis, the weight of the evidence suggests being slightly more defensive is warranted," Lerner said.
The consensus projection for US gross domestic product (GDP) has been falling throughout 2025.
But now, as President Trump's tariffs have heightened recession fears, strategists are wondering if consensus growth expectations have come down far enough.
"I'm not sure the stock market has quite processed the probability of a recession," Ritholtz Wealth Management chief markets strategist Callie Cox told Yahoo Finance.
Read more: 7 ways to recession-proof your savings
Weekly calendar
Monday
Economic data: Leading index of economic indicators, March (-0.4% expected, -0.3% previously)
Earnings: Comerica ( CMA )
Tuesday
Economic data: Richmond Fed manufacturing index, April (-4 previously)
Earnings: Tesla ( TSLA ), Capital One ( COF ), Enphase Energy ( ENPH ), GE Aerospace ( GE ), Halliburton ( HAL ), Lockheed Martin ( LMT ), SAP ( SAP ), Steel Dynamics ( STLD ), Verizon ( VZ )
Wednesday
Economic data: S&P Global US manufacturing PMI, April preliminary (50.2 previously); S&P Global US services PMI, April preliminary (54.4 previously); S&P global US composite PMI, April preliminary (53.5 previously); New home sales month-over-month, March (1% expected, 1.8% previously); Fed releases Beige Book
Earnings: Chipotle ( CMG ), Alaska Air Group ( ALK ), AT&T ( T ), Boeing ( BA ), GE Vernova ( GEV ), IBM ( IBM ), Las Vegas Sands ( LVS ), Newmont ( NEM ), NextEra Energy ( NEE ), O'Reilly Automotive ( ORLY ), Philip Morris International ( PM ), ServiceNow ( NOW ), Texas Instruments ( TXN ), Vertiv ( VRT )
Thursday
Economic data: Initial jobless claims, week ending April 19 (215,000 previously) Chicago Fed national activity index, March (0.18 previously); Durable goods orders, March preliminary (1.5% expected, 1% previously); Durable goods orders ex-transportation, March preliminary (0.3% expected, 0.7% previously); Capital goods orders, non-defense excluding air, March preliminary (+0.2% expected, -0.2% previously); Existing home sales, March month-over-month (-3.1% expected, +4.2% previously); Kansas City Fed manufacturing activity (-2 previously)
Earnings: Alphabet ( GOOGL , GOOG ), American Airlines ( AAL ), Freeport-McMoRan ( FCX ), Intel ( INTC ), Merck ( MRK ), Nasdaq ( NDAQ ), Nokia ( NOK ), PepsiCo ( PEP ), Skechers ( SKX ), Southwest Airlines ( LUV ), T-Mobile ( TMUS ), Union Pacific ( UNP ), Valero ( VLO )
Friday
Economic data: University of Michigan consumer sentiment, April final (50.8 previously)
Earnings: AbbVie ( ABBV ), Charter Communications ( CHTR ), Colgate-Palmolive ( CL ), Phillips 66 ( PSX )
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer .