Global Highlights for This Week : "Magnificent Seven" Earnings Blitz and Powell’s Potential "Final Act"

After a period of heated gains, the U.S. stock market enters a pivotal week—defined by a heavy slate of Big Tech earnings and a Federal Reserve interest rate decision that could mark Jerome Powell’s final meeting as Chair.

 

The three major U.S. indices surged significantly, rebounding from Iran-conflict anxieties to hit fresh all-time highs. As of last Friday, the S&P 500 has climbed approximately 13% since March 30, while the tech-heavy Nasdaq has jumped over 19% in the same period.

 

"The market has moved a long way in a short time," said Anthony Saglimbene, Chief Market Strategist at Ameriprise. "This week will be the ultimate litmus test to see if this rally has legs."

 

While the Mideast ceasefire has eased immediate fears of escalation and fueled the rebound, developments in the U.S.-Israel-Iran conflict may continue to rattle asset prices.

 

Notably, hopes for a second round of peace talks were dampened after President Trump cancelled a planned trip to Islamabad for envoys Steve Witkoff and Jared Kushner on Saturday, citing "infighting and confusion" within the Iranian leadership.

 

"Our concern is that while the market has bounced, we haven't reached a permanent resolution," noted Sid Vaidya, Chief Investment Strategist at TD Wealth.

 

"The longer the tension persists, the greater the risk to the real economy, which could eventually translate into market volatility or downward pressure."

Earnings Verdict for the "Magnificent Seven"

Optimism over corporate earnings continues to anchor bullish sentiment, following a solid start to the Q1 reporting season.

 

According to Tajinder Dhillon, Earnings Research Lead at LSEG, 81.3% of S&P 500 companies reporting as of Friday have topped estimates, with overall Q1 earnings projected to grow 16.1%.

 

This week, more than a third of the S&P 500 will report, including five members of the "Magnificent Seven"—the engines of the three-year bull market:

• Wednesday (After-Market): Microsoft, Alphabet, Amazon, and Meta are scheduled to report. Investors will be laser-focused on their capital expenditure plans for data centers and AI infrastructure.
• Thursday (After-Market): Apple will report, marking its first earnings call following the recent change in its CEO.

To sustain the current rally, these giants must deliver genuine surprises. After a mixed start to the year, the "Magnificent Seven" and the broader tech sector have been exceptionally strong last month.

 

The semiconductor sector has been the standout performer, with the Philadelphia Semiconductor Index (SOX) posting an 18-day winning streak as of Friday. Other heavyweights reporting this week include Eli Lilly, Exxon Mobil, and Visa.

Powell’s "Final Act"?

The Federal Reserve is widely expected to hold rates steady this week.

 

Since this meeting does not include new economic projections or a "dot plot," the focus will shift entirely to how policymakers view the economic fallout of the Mideast war and the future interest rate path.

 

Concerns over war-driven energy prices have already slashed rate-cut expectations. LSEG data shows the market now prices in less than one standard 25-basis-point cut by December—a sharp reversal from the two-cut expectation held before the conflict erupted in late February.

 

This meeting could also be Jerome Powell’s last, with his term as Chair set to expire on May 15. President Trump’s nominee for the post, Kevin Warsh, appeared before a Senate subcommittee for confirmation hearings this week.

 

Notably, the U.S. Justice Department reportedly ended its investigation into Powell regarding Fed headquarters renovation costs on Friday, clearing a major political hurdle for Warsh’s transition.

 

"Our view remains that a Warsh-led Fed will be more dovish on rates," said Mohit Kumar, Chief European Economist at Jefferies, which still forecasts two rate cuts this year.

 

This week will also bring Q1 U.S. GDP data and the March Personal Consumption Expenditures (PCE) price index—the Fed’s preferred inflation gauge.

 

Both reports are expected to reveal the extent of the economic impact from the Mideast conflict to date. Beyond the Fed, the ECB, Bank of Japan, and Bank of England are also scheduled to announce rate decisions.

Key Events for the Week Ahead:

Monday (Apr 27): German GfK Consumer Confidence (May), U.S. Dallas Fed Mfg Business Index (Apr).

 

Tuesday (Apr 28): Japan Unemployment Rate (Mar), ADP Jobs Change Survey, U.S. Consumer Confidence (Apr), Bank of Japan (BoJ) Interest Rate Decision and Outlook.

 

Wednesday (Apr 29): U.S. API Crude Inventories, Australia CPI (Mar), Eurozone Economic Sentiment (Apr), Germany CPI (Apr), TSE Closed (Showa Day).

 

Thursday (Apr 30): Fed (FOMC) Interest Rate Decision & Press Conference, Bank of England (BoE) Rate Decision, ECB Rate Decision, China Official Manufacturing PMI (Apr), U.S. Core PCE Price Index (Mar).

 

Friday (May 1): UK Manufacturing PMI, U.S. ISM Manufacturing PMI, Labor Day (Global Market Closures).