Here are the 2 big things we're watching in the stock market in the week ahead

Wall Street faces a critical week as President Trump's 90-day reciprocal tariff pause expires Wednesday, potentially implementing steeper, country-specific duties. This tariff deadline is set to dominate market sentiment given a sparse economic calendar, with the S&P 500 at record highs but an overbought oscillator suggesting potential for volatility and profit-taking if trade rhetoric intensifies or new deals are not announced. While the administration has sent mixed signals on extensions and new rates, key earnings from Delta, Conagra, and Levi Strauss will provide early insights into consumer health ahead of the broader Q2 earnings season.

Analysis

The market is entering a pivotal week with the S&P 500 at record highs, having rallied 26% since its April 8 low, yet facing significant event risk from U.S. trade policy. The primary catalyst is the expiration of President Trump's 90-day tariff pause on Wednesday, which could trigger steeper, country-specific duties. This event is magnified by a light economic and earnings calendar, focusing all investor attention on trade developments. The administration has issued mixed signals, with Trump stating he is not considering an extension while Treasury Secretary Bessent noted tariffs would revert to higher April levels by August 1 for countries without deals. While some agreements have been struck (China, UK, Vietnam), uncertainty remains high regarding potential deals with key partners like India, Japan, and South Korea. This precarious situation is compounded by a market in a technically 'very overbought' state, as indicated by an S&P Short Range Oscillator north of 8%, making it highly susceptible to profit-taking or an outsized negative reaction to any hawkish rhetoric. The few earnings reports this week, notably from Delta (DAL), Conagra (CAG), and Levi Strauss (LEVI), will serve as crucial, albeit limited, gauges of consumer health and inflationary pressures ahead of the broader Q2 reporting season.

Key Decisions for Investors

• Given that the market is technically overbought with the S&P 500 up 26% since April, investors should consider trimming positions in top-performing stocks to lock in gains ahead of the Wednesday tariff deadline, which presents a significant volatility risk.
• Monitor White House communications and news flow regarding trade negotiations with Japan and South Korea, as the lack of new deals or any escalation in rhetoric could serve as a primary catalyst for a market pullback.
• Pay close attention to earnings commentary from Delta, Conagra, and Levi Strauss for early insights into consumer spending, inflation, and supply chain health, as these will be key themes for the broader Q2 earnings season.