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Investing.com - U.S. President Donald Trump’s tariff policies remain the lynchpin story for markets, particularly after the White House announced some tech-related exemptions to punishing reciprocal duties. A slate of corporate earnings could provide a glimpse into how many businesses are planning for a tariff-clouded future, while data from China may shed light on the state of the world’s second-largest economy and central target of Trump’s levies.
1. Tariffs remain in focus
As it has been throughout recent weeks, any developments around Trump’s tariff policy will likely be a major focus for investors in the coming days.
Over the weekend, Trump moved to clarify some technology-related exceptions to his levies which the White House announced with little fanfare late on Friday.
The Trump administration had announced that smartphones, computers and other electronics would be temporarily exempted from the president’s punishing reciprocal duties. Technology stocks in China, the central target of Trump’s duties, rose sharply on Monday, while shares in Apple (NASDAQ:AAPL) -- whose supply chain relies heavily on China -- climbed in premarket U.S. trading.
Still, in a post on his social media platform, Trump said that "NOBODY is ’getting off the hook’" for what he has deemed to be unfair trade barriers and "Non Monetary Tariff barriers."
He added that his officials were "taking a look" at semiconductors and "the whole electronics supply chain," arguing that more products need to be made in the U.S. and "not be held hostage by other countries" such as China.
2. Earnings ahead
Banking giant Goldman Sachs is set to headline a slew of a major corporate earnings on Monday, after many of its peers on Wall Street flagged that Trump’s tariffs could dent earnings and depress dealmaking.
Goldman Sachs is tipped to report first-quarter net revenue of $14.76 billion and adjusted earnings per share of $12.26, according to Bloomberg consensus estimates.
Last week, executives at lenders like JPMorgan Chase (NYSE:JPM) and BlackRock (NYSE:BLK) CEO Larry Fink warned that the levies may weigh on broader economic activity, with JPMorgan boss Jamie Dimon in particular saying he was "paying attention" to anecdotes that some IPOs and deals had been scrapped due to the tariffs.
Other major results are due out this week, including figures from Bank of America (NYSE:BAC) and Citigroup (NYSE:C) on Tuesday, Abbott Laboratories (NYSE:ABT) and Prologis (NYSE:PLD) on Wednesday, and Netflix (NASDAQ:NFLX) on Thursday.
3. Powell to speak
Elsewhere, Federal Reserve Chair Jerome Powell is scheduled to deliver remarks to the Economic Club of Chicago on Wednesday.
Powell previously warned on April 4 that Trump’s tariffs are "larger than expected" and could spark a spike in inflation and a slowdown in growth.
However, he flagged at the time that it remained too soon to determine what the correct response to the levies should be. Investors have been looking to the Fed to provide some reassurance that it stands ready to step in to calm sentiment should the tariffs fuel further rounds of extreme market stress, while Trump himself has called on the central bank to cut interest rates.
Crucially, analysts noted that Powell’s upcoming statement will be the first since Trump unveiled a partial 90-day delay of his sweeping tariffs last week following a massive bout of turbulence in stock and bond markets.
4. Chinese data
Economic figures from China this week could provide an indication of the state of the world’s second-largest economy prior to the pronouncement of increased tariffs by the White House.
China’s trade balance grew more than expected in March, aided by an outsized surge in exports that was underpinned by apparent front-loading before the imposition of U.S. trade taxes.
The country logged a trade surplus of $102.64 billion in March, higher than expectations of $74.30 billion, government data showed on Monday.
Exports surged by 12.4% versus a year-ago, greater than the 4.4% uptick expected by economists, in a sign that U.S. importers were rushing to secure goods before Trump’s duties come into effect and a trade war between Washington and Beijing escalates even more.
Separately, first-quarter gross domestic product data from China is set to released, as well as retail sales and industrial production figures.
5. ECB decision
The European Central Bank is due to hold its latest policy meeting on Thursday, with traders widely expecting a 25-basis point reduction in its key deposit rate to 2.25%.
ECB policymakers may be persuaded to bring borrowing costs down below 2% later this year, depending on the trajectory of Trump’s tariff policy, analysts have said.
Last week, Bank of Finland governor and ECB policymaker Olli Rehn said that Trump’s trade actions have exacerbated downside risks and bolstered the case for a rate reduction at the central bank’s April 17 meeting.
Trump has slapped -- but then postponed -- a 20% tariff on the European Union, which counts several Eurozone countries among its members, as part of his reciprocal levies. The EU still faces universal 10% tariffs as well as a 25% duty on steel and aluminum and cars.