Stocks of the Nasdaq 100 Dip 1% Ahead of Tech Earnings

Asian stock markets started the week cautiously as investors waited for updates on U.S. trade talks with the region and any indications that China might introduce additional stimulus measures before committing to bigger market risks.

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A key regional index rose 0.6%, but futures tied to the S&P 500 slipped 0.6%, suggesting that Wall Street’s four-day rally might be coming to an end. European futures remained largely unchanged. Meanwhile, gold prices fell as much as 1.6% as traders pulled back from bullish bets, worried the metal’s rally had moved too far, too fast. The yield on the 10-year U.S. Treasury note climbed by one basis point, and the U.S. dollar held steady.

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This week marks one of the busiest earnings periods for Asia, and investors are also closely watching several key economic reports. These include the Bank of Japan’s interest rate decision, the U.S. jobs report, and GDP data.

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Together, these updates will offer clues about whether the recent calmness in financial markets can last, especially with trade tensions still looming. Many traders are also finding some reassurance in the possibility that the Federal Reserve could cut interest rates sooner than previously expected.

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“The market has been more optimistic lately, but I prefer to stay defensive, focusing more on domestic-oriented investments across markets,” said Xin-Yao Ng, a fund manager at Aberdeen Investments in Singapore. He added that market conditions are likely to stay highly uncertain and volatile this year, largely because of ongoing concerns about tariffs and geopolitical issues.

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In the U.S., four members of the so-called "Magnificent Seven" — Microsoft, Apple, Meta Platforms, and Amazon — are scheduled to report earnings this week. Analysts are forecasting that this group, which also includes Alphabet (Google’s parent company), Tesla, and Nvidia, will post average profit growth of around 15% in 2025. Notably, that projection has remained steady since early March despite escalating trade tensions.

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Turning to Europe, Ukrainian President Volodymyr Zelenskiy expressed hope for achieving a “reliable and lasting peace” after meeting privately with U.S. President Donald Trump. However, Trump later voiced skepticism about whether Russian President Vladimir Putin truly wants the war in Ukraine to end.

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Market participants are watching closely for any breakthroughs in U.S. trade talks, especially after Trump indicated it’s unlikely there would be another delay in imposing higher tariffs. Asian countries, many of which are facing the highest U.S. reciprocal tariffs, are leading efforts to negotiate deals ahead of their Western counterparts.

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To streamline upcoming discussions, Trump’s team has put together a negotiation framework with about 18 countries. This includes a common template highlighting key areas of concern to guide talks. U.S. Treasury Secretary Scott Bessent noted that the administration is working on bilateral trade agreements with 17 important partners, excluding China. He reaffirmed the view that China will eventually have to come to the table, arguing that Beijing cannot bear the burden of the U.S.’s 145% tariff rate on Chinese goods for long.

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For more on the tariff situation:

• Asia is leading efforts to strike interim deals and dodge U.S. tariffs.
• Fast-fashion giant Shein has sharply increased U.S. prices ahead of tariff hikes.
• Trump's first 100 days back in office have been described as chaotic for global trade.
• Analysts warn that Trump’s China tariffs could spark a supply shock in the U.S. economy.
• Investors exposed to currency risks are bracing for further dollar-driven pain.

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Commenting on the situation, Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, said on Bloomberg TV: “Ultimately, we need to think about what steady-state tariffs will look like between the U.S. and the rest of the world. And we need to consider how economies like China and Europe will adapt. The uncertainty makes it incredibly difficult for businesses to plan.”

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Some investors are also skeptical that Wall Street’s usual pattern of rapid recoveries will repeat itself this time. They're keeping a close eye on less-publicized but important high-frequency data points that could reveal whether recent policy disruptions are likely to cause long-term economic harm.

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Meanwhile, China’s Finance Minister Lan Fo’an announced that the country will roll out more proactive and effective policies aimed at reaching its growth targets and contributing to global economic stability. His comments were posted on the finance ministry’s website over the weekend.

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On Monday, equities in China and Hong Kong moved between gains and losses. Chinese officials reiterated their commitment to supporting job growth and economic stability, expressing confidence that this year’s targets would be met. The People’s Bank of China also pledged to maintain ample market liquidity and to cut banks’ reserve requirements and interest rates “at an appropriate time.”

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In Japan, Toyota Industries Corp. was set to surge to its daily trading limit. Investors are still digesting the news that Akio Toyoda, Chairman of Toyota Motor Corp., has proposed buying out Toyota Industries — a move that could have significant implications for corporate governance at Japan’s largest business group.

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