[New York Stock Market - Weekly Outlook] Recovery from 'Liberation Day' Shock: Spotlight on Powell

# U.S. Stocks Brace for a Crucial Week Amid Tariff Talks and Powell's Comments Wall Street gears up for a tumultuous week (May 5–9) as the focus shifts to U.S. trade negotiations and significant remarks from Federal Reserve Chairman Jerome Powell. These developments are poised to shape market trajectories. The recent uptick on Wall Street justified President Donald Trump’s April 9 assertion of a “buying opportunity.” Over the past month, the New York Stock Exchange's market cap has soared by $5 trillion, fully rebounding from the tariff-induced shock dubbed "Liberation Day." # Market Rally Drivers The recent rally was propelled by optimism surrounding U.S.-China trade talks and strong economic indicators. Contrary to pessimistic forecasts, the U.S. labor market displayed robust strength in April, while the personal consumption expenditures (PCE) price index for March showed no monthly increase—the smallest rise in five years. Despite a -0.3% annualized contraction in first-quarter GDP—the first drop in three years—analysts attributed this to businesses front-loading imports ahead of previous tariff measures. Indicators like the final sales to private domestic purchasers, an alternative measure of core demand, climbed 3.0%, surpassing Q4’s 2.9%. # Anticipation for Powell’s Remarks and Fed Rate Decision Investors eagerly await Powell's commentary at the Federal Open Market Committee (FOMC) meeting on May 7. The consensus is that the Fed will maintain the federal funds rate. According to CME FedWatch data, futures markets have priced in a 97.2% probability of a rate hold. Market participants are particularly interested in Powell’s insights on tariffs, President Trump’s push for rate cuts, the potential timing for a rate cut (June or July), economic growth forecasts, market volatility, supplementary leverage ratio (SLR) reforms, and expectations for aggressive easing. # High-Level Trade Talks in Focus Market sentiment may also be influenced by President Trump’s meeting with Canadian Prime Minister Mark Carney on May 6. Productive talks could boost investor confidence. However, uncertainty looms. “The outlook for tariffs, retaliatory measures, and easing remains unclear,” said Phil Peccock, Chief Investment Officer at Anacapa Advisors. “We are still in uncharted territory.” # Key Data and Economic Events - **May 5:** Institute for Supply Management (ISM) releases services PMI data for April, forecasted at 50.6, slightly below March’s 50.8. - **May 6:** U.S. trade balance figures for March, expected with a $129 billion deficit. - **May 7:** Focus on FOMC rate decision and Powell’s press conference for forward guidance on interest rates and economic priorities. - **May 8:** Weekly jobless claims data, preliminary Q1 unit labor costs, nonfarm productivity numbers, and final March wholesale inventories. - **May 9:** Speeches from various Federal Reserve officials, including Michael Barr, John Williams, Adriana Kugler, Lisa Cook, and others, expected to illuminate monetary policy direction. # Earnings to Watch This week's lineup includes quarterly reports from notable companies such as Palantir Technologies and Ford on May 5, AMD on May 6, Walt Disney on May 7, and Microchip Technology on May 8. # Weekly Schedule - **May 5:** April ISM Services PMI, April S&P Services PMI, Earnings: Palantir, Ford, Clorox. - **May 6:** March U.S. Trade Balance, Earnings: AMD, Marriott International, Constellation Energy. - **May 7:** FOMC Rate Decision, Powell Press Conference, March Consumer Credit, Earnings: Walt Disney, DoorDash. - **May 8:** Weekly Initial Jobless Claims, Preliminary Q1 Unit Labor Costs, Q1 Nonfarm Productivity, March Final Wholesale Inventories, April New York Fed Inflation Expectations, Earnings: Microchip Technology, Warner Bros., Paramount Global. - **May 9:** Addresses from key Fed officials, including Michael Barr, John Williams, Adriana Kugler, Lisa Cook, Thomas Barkin, Austan Goolsbee, Christopher Waller, Beth Hammack, Alberto Musalem, and Michelle Bowman. Markets are poised for a decisive week, ready to analyze each detail from Powell’s statements and economic data releases, which may set the tone for near-term equity trends.