Weekly Market Outlook: Trade Truce, CPI, Earnings, Fed Speeches, and Tax Debate

As U.S. stock futures rallied on hopes of easing U.S.-China tensions, investors now turn their attention to key economic data and corporate results that will shape market direction in the coming days.

1. U.S.-China Trade Agreement Eases Tensions

In a rare joint statement, Washington and Beijing agreed to a 90-day pause on most reciprocal tariffs, cutting levies to 10% on both sides (a 20% fentanyl-related tariff remains). U.S. Treasury Secretary Scott Bessent affirmed that “neither side wanted a decoupling,” and both delegations will now pursue working-level talks on economic and trade issues.

2. CPI Looms Large

April's Consumer Price Index release is expected this week, with consensus forecasts pegging year-over-year inflation at 2.4%, matching March's rate. Since tariffs can feed into higher import costs, this reading will offer an early glimpse into whether recent trade measures are stoking price pressures. Investors can track all upcoming U.S. inflation and trade-impact data via the Economics Calendar API.

3. Earnings Season Continues

With more than 70% of S&P 500 companies having reported, aggregate first-quarter earnings are on pace to jump 13.6% year-on-year—well above initial estimates. This week's slate includes major retailers such as Walmart (NYSE:WMT), Target (NYSE:TGT), Home Depot (NYSE:HD), and Lowe's (NYSE:LOW). Keep an eye on how trade-related cost pressures are reflected in their guidance and margins.

4. Fed Speakers on Deck

Following the Fed's decision to hold rates at 4.25%-4.5%, Chair Jerome Powell, Vice Chair Philip Jefferson, and Governors Adriana Kugler, Christopher Waller, and Michael Barr will deliver speeches. Markets will listen for clues on whether policymakers believe tariffs or slowing growth warrant a shift in monetary policy.

5. Tax Cut Debate in Congress

The House Ways and Means Committee meets Tuesday to debate a draft of President Trump's proposed tax plan. Highlights include an expanded child tax credit and cuts for multinationals, but key issues—such as SALT deductions and Medicaid funding—remain unresolved. How Congress navigates these conflicts could influence consumer spending and deficit outlooks.

Bottom Line:
With trade risks easing temporarily, the next market catalysts will be CPI inflation, corporate earnings, Fed guidance, and the progress of tax legislation. Stay positioned for potential volatility as these data points unfold.