The first-quarter earnings season is about to start, and, after the stock market's drubbing this past week, companies should have lots to talk about and be ready to talk about it.
Stocks suffered their worst two-day losses since 2020 after President Trump announced his new list of tariffs on Wednesday.
The Standard & Poor's 500 fell 10,5% over Thursday and Friday. The Nasdaq Composite Index fell 11.4%. The Dow Jones Industrial Average fell 7.9%.
More than $6 trillion of investor wealth was erased.
Futures trading late Sunday signaled stocks will open sharply lower on Monday. In addition, crude oil was off nearly 4% in Sunday trading. And bitcoin slumped to around $77,800, potentially its lowest price since early November.
Only 14 S&P 500 stocks were higher on Friday, along with just one stock in the Dow Jones Industrial Average (Nike (NKE) , up 2.8%) and two stocks among the Nasdaq-100 Index. (MicroStrategy (MSTR) , up 4%, and Lululemon Athletica (LULU) , up 3.2%. )
Apple (AAPL) has fallen 28% from its 52-week high of $260.10 on Dec. 26.
When the week began, Apple had the world's largest market capitalization — nearly $3.3 trillion.
Apple tumbled 13.6% during the week and, by Friday, was no longer $3-trillion company. Its market cap was "only" $2.83 trillion.
The Nasdaq and Nasdaq-100 were both off more than 20% from their recent peaks — the popular definition of a bear market.
The S&P 500 was off 17.4% from its 52-week high on Feb. 19. The Dow was off 15% from its peak.
In short, the market was not at all behaving like Wall Street had been expecting. You probably heard the experts: There might be a little turbulence to start the year and decent gains by year-end thanks to a good economy, plus tax cuts and deregulation. Just like 2023 and 2024.
There was little talk about massive tariff hikes.
Traders at the New York Stock Exchange on Thursday. The major averages slumped badly after in reaction to President Donald Trump's announcement of sweeping tariffs.Michael M. Santiago/Getty Images
Could a rebound be ahead?
Markets were so sold off by Friday that the major indexes showed relative strength indexes well under 30.
A relative strength index measures how fast something moves in the short run—up or down—compared with changes over longer periods of time.
In the case of financial instruments, an RSI over 70 or higher is an overbought signal. UNDER 30, a rebound is coming.
On Friday, the RSIs for the S&P 500, the Nasdaq, the Nasdaq-100, and the Dow industrials fell below 25.
So, if the economy and political world cooperate, at least a short rebound relatively soon is possible. But a sustained recovery will take time.
Earnings reports due this week from an airline and five big financial institutions will help explain where things stand.
We'll start with Delta Air Lines (DAL) , due Wednesday morning. Delta closed Friday at $37.25, down 15% on the week, 38.4% on the year and 46.8% from its 52-week high on Jan. 25.
Delta and other airlines started to cut guidance in early March, citing reduced bookings and demand due to a stressed economy. The airline said corporate travel is down, and regular consumers are increasingly price-sensitive to fares.
The financial institutions all report early Friday. They are:
JPMorgan Chase (JPM) . Friday close: $210.28, down 7.5%. Change for week: -13.4%. Year to date change: -12.3%. Change from 52-week high: -25%.
Wells Fargo (WFC) . Friday close: $60.98, down 7.1%. Change for week: -13.7%. Year to date change: -13.3%. Change from 52-week high: -25.2%.
Investment bank Morgan Stanley (MS) . Friday close: $99.83, down 7.5%. Change for week: -13.4%. Year to date change: -20.6%. Change from 52-week high: -29.7%.
Investment manager BlackRock (BLK) . Friday close: $822.62, down 7.3%. Change for week: -13.1%. Year to date change: -19.8%. Change from 52-week high: -24.1%.
Bank of New York Mellon (BK) . Friday close: $73.31, down 8.3%. Change for week: -11.4%. Year to date change: -4.6%. Change from 52-week high: -18.9%.
In Delta's case, the questions should center on travel demand and the impact of tariffs on bookings, both domestic and international.
For the financial institutions, additional questions should be like these:
What are your economists telling you know about the U.S. and global economies?
How is your institution coping with the market volatility since the end of January?
What stresses are you seeing from your customers?
How will the Trump tariff regime affect your company's prospects?
Is the tariff uncertainty already causing business disruption or planning?
Lastly, but most importantly, was last week's slump a signal that an already weak economy has fallen or is near falling into a recession. If so, how serious a recession?
Maybe the CEO will be on the earnings call and take charge of the questions. The companies can't avoid them, and they should offer real insight into what they see.
Anyone can listen in on an earnings call. Just go to the investor relations section of a company's website, and there should be a link to the earnings call. A recording is available after the call, and transcripts appear in a few days.
This is likely to be an interesting earnings season.
