Wall Street’s balancing act: Optimism meets uncertainty as big tech earnings loom

2 minutes read

29 April 2025

Wall Street’s balancing act: Optimism meets uncertainty as big tech earnings loom

The mood on Wall Street is tense but hopeful. After a turbulent start to the year, the S&P 500 and Dow Jones have strung together five straight days of gains. But as the market inches higher, investors are bracing for a week that could set the tone for the rest of 2025. With Big Tech earnings on deck and trade tensions simmering, everyone is asking the same question: can this rally last, or is another storm brewing?

Big tech faces the spotlight

This week, the market’s gaze is fixed on the “Magnificent Seven”-Apple, Amazon, Meta, and Microsoft. Together, these giants make up nearly 20% of the S&P 500, so their earnings can sway the entire market. But expectations are sky-high. Wall Street still forecasts an average 15% profit growth for these companies by 2025, even as trade disputes and tariffs threaten to disrupt global supply chains.

Phil Blancato, CEO of Ladenburg Thalmann Asset Management, summed up the stakes: “Any modicum of a weaker than expected number is going to cause a further selloff because of the concern around tariffs.”

Apple, for example, is especially vulnerable. Its supply chain runs deep into China, and new tariffs could push up costs and squeeze profits. There’s talk that consumers might rush to buy iPhones before prices rise, but analysts warn this could be a short-lived boost. Amazon faces similar risks, with tariffs threatening its e-commerce and advertising businesses. Still, some experts see a silver lining. Jefferies analyst Brent Thill points out that Amazon’s high-margin web services division could help cushion the blow.

Despite the anxiety, some analysts remain optimistic. The recent selloff has pulled valuations down, making these tech giants look more attractive by historical standards. Alphabet, for example, now trades at 17 times next year’s projected profits, compared to a decade average of 21. As Josh Schafer of Yahoo Finance noted, “The key question will be whether these companies can provide any reassurances to investors.” A detailed stock performance table showing the latest prices, daily and yearly changes, and market capitalizations of major companies like Apple, Microsoft, Amazon, and Meta, with the Winvesta logo in the corner.

Analysts hunt for resilience in a volatile market

While Big Tech commands the headlines, top Wall Street analysts are also flagging other stocks they believe can thrive-even in choppy waters. Charles Schwab is one such name. After beating earnings expectations in April, the financial services giant caught the eye of TD Cowen’s William Katz, who called Schwab his “top pick” and raised his price target to $95.

Katz praised Schwab’s strong trading activity, rising client cash, and robust net new assets. “April began on a strong note for the company, thanks to robust trading, a continuing increase in client cash, stable client margin balances, and anticipated solid net new assets (NNAs),” he wrote. This kind of resilience is exactly what investors are searching for as uncertainty lingers.

But the broader market still faces big questions. If trade tensions escalate or earnings disappoint, some strategists warn of more pain ahead. “If there’s a 50% chance of a recession, you should expect an additional 20%-25% decrease in equities from this point,” said Colin Graham, head of multi-asset strategies at Robeco. Yet, even the bears admit that any hint of tariff relief could spark a rally.

Wall Street is walking a tightrope. With Big Tech earnings and economic data set to drop, the next few days could tip the scales toward renewed optimism-or deeper caution. For now, investors are watching, waiting, and hoping for good news.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.