S&P500 Forecast: US Indices Flat as Tariff Uncertainty Pressures Stocks, Tesla Outperforms

Wall Street Treads Water Ahead of Key US-China Trade Talks

U.S. stocks are trading nearly flat on Friday as we head into the close, with investors hesitating to take on risk ahead of the highly anticipated trade discussions between U.S. and Chinese officials set for the weekend. Markets absorbed President Trump’s latest remarks, in which he proposed slashing Chinese tariffs to 80% from the current 145% but still left little optimism for an immediate resolution. The indecision kept major indexes range-bound, with all three poised for slight weekly losses.

Is Caution the New Strategy Ahead of the Trade Meeting?

Traders are clearly waiting for clarity on tariffs before adjusting exposure. Trump’s insistence that an 80% tariff is “right” does little to soothe concerns over global growth or supply chains. Michael Matousek of U.S. Global Investors noted that even a reduced tariff level could keep buyers away, emphasizing how sensitive the market is to trade rhetoric. Portfolio de-risking was evident across sectors as investors positioned cautiously before the weekend’s talks in Switzerland.

How Are Sectors and Stocks Reacting to the Trade Overhang?

Energy stocks led the S&P 500 with a 0.8% gain, backed by stronger oil prices. Consumer discretionary names also held up, while financials came under pressure. Tech, healthcare, and communication services saw broader selling.

Notable movers included:

• Tesla jumped 5.6%, standing out among growth names.
• Expedia fell 7.7% after missing revenue expectations.

• Trade Desk soared 22% on better-than-expected earnings.
• Insulet gained 18.5% following a strong profit beat.

Winners outnumbered losers by a 1.54-to-1 ratio on the NYSE and 1.01-to-1 on the Nasdaq. However, new highs were limited, showing the market’s underlying strength is still patchy.

What Do Fund Flows and Fed Remarks Signal?

According to LSEG, consumer discretionary funds saw the strongest inflows during the week, while financials were the most sold. The Federal Reserve’s recent pause on rate hikes was quickly overshadowed by cautionary remarks from policymakers who warned of increasing economic risks tied to tariffs. With about 76% of S&P 500 companies beating Q1 estimates but many withdrawing guidance, confidence remains fragile.

What’s Next for Traders Watching the Market?

With major indexes holding near late-March levels and tariff risks still unresolved, traders are focusing on the outcome of the U.S.-China talks in Switzerland. A positive surprise could drive a relief rally, while lack of progress may trigger renewed selling. Earnings season is largely behind, but Fed commentary and trade developments remain the key drivers for near-term market direction.

More Information in our Economic Calendar.