Schwab Market Update
Monday Blues: Fed Worries Hurt Stocks, Yields

Published as of: April 21, 2025, 9:15 a.m. ET
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The markets | Last price | Change | % change |
---|---|---|---|
S&P 500® index |
5,282.70 |
+7.00 |
+0.13% |
Dow Jones Industrial Average® |
39,142.23 |
-527.16 |
-1.33% |
Nasdaq Composite® |
16,286.45 |
-20.71 |
-0.13% |
10-year Treasury yield |
4.39% |
+0.07 |
-- |
U.S. Dollar Index |
98.26 |
-1.11 |
-1.12% |
Cboe Volatility Index® |
31.98 |
+2.33 |
+7.85% |
WTI Crude Oil |
$63.04 |
-1.64 |
-2.54% |
Bitcoin |
$87,275.81 |
+2,680.15 |
+3.17% |
(Monday market open) A long weekend didn't help Wall Street's mood. Stocks and the dollar tumbled early, still suffering indigestion from worries that President Trump might try to fire Federal Reserve Chairman Jerome Powell. That possibility, which the White House floated Friday, might also explain a sharp increase in longer-term U.S. Treasury note yields this morning. If Trump fired Powell, "the market reaction would likely be negative, as the independence of the Fed is highly valued," said Kathy Jones, chief fixed income strategist at Schwab.
Earnings get heavy this week as investors brace for Tesla (TSLA), Alphabet (GOOGL), and Boeing (BA). With 12% of S&P 500 companies reporting results, 71% have beaten analysts' earnings per share estimates and 61% have reported a positive revenue surprise, FactSet said. The blended EPS growth rate, which includes companies reporting and estimates for those that haven't, is 7.2%. Eyes also turn toward Treasury auctions after recent signs of weaker demand for U.S. assets that rattled markets. And of course, global trade remains front and center after last week saw the S&P 500 index (SPX) fall 1.5% and the tech-heavy Nasdaq Composite ($COMP) slip 2.6%. The longer it takes for an official trade deal to come together, the worse it is for the economy and the stock market, said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research.
Coming days bring March leading indicators from the Conference Board, new home sales, the Fed's Beige Book on economic conditions around the country, and final April consumer sentiment. Leading indicators is the first of the week's data, due shortly after today's open. It fell 0.3% in February and analysts expect another 0.3% drop in March. Turning to fixed income, a 2-year Treasury note auction tomorrow looms, and could help set direction for yields and stocks.
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Three things to watch
1. Stay tuned for tech: Analysts expect 14% first quarter earnings per share (EPS) growth for the info tech sector, according to FactSet. Investors might very well discount strong first quarter numbers as "pull-forward" demand ahead of expected tariffs. Like with home renovation during the early days of the pandemic, that kind of demand doesn't always last and can act as a vampire on future quarters' growth. The vanguard of big tech reporting comes this week when chip makers Intel and Texas Instruments (TXN) share earnings, along with mega cap Alphabet. Though Alphabet is defined as a communication services stock, its cloud business competes with those of tech giants Microsoft (MSFT) and Amazon (AMZN)—another non-tech company with a major toehold in tech due to its cloud business. Microsoft, Apple (AAPL), and Meta Platforms (META) release their results next week. Spending trends will be closely watched as worries about slower economic growth could hurt anticipated cloud and digital advertising demand. And a big question is whether recent blockbuster AI spending by so-called hyperscalers might be whittled down in these uncertain times. Such a move might be welcomed by some investors worried about the margin impact of such spending.
2. Defensive line: Big military contractors line up to report this week, with Boeing, Northrop Grumman (NOC), and Lockheed Martin (LMT) all due tomorrow and Wednesday. Year to date, NOC is up sharply, LMT is down slightly, and Boeing is off modestly, showing that despite some similarities in their businesses, not all perform the same on Wall Street. Boeing, of course, is burdened by its huge commercial air division, making the comparison a bit unfair. Last week the struggling jet maker took another hit as China banned its airlines from buying Boeing planes. First quarter deliveries for Boeing's Defense, Space & Security division totaled 26, up from 14 during the same quarter a year earlier. On a positive note for all three, President Trump said last week he wants to see the U.S. defense budget reach $1 trillion this year, but on the negative side, U.S. defense partners in Europe, angered by U.S. tariffs, appear eager to invest in manufacturing their own defense technology to reduce reliance on U.S. parts and supplies for weapons, Politico recently reported. German defense stocks suddenly grew popular in investment circles. It might be interesting to check earnings calls from these three mammoth defense firms for any color on initial reactions to tariffs from international customers.
3. Powell talk: The benchmark 10-year Treasury note yield, which could move this week on auction news, crept above 4.4% this morning, up 12 basis points from last week's lows, possibly on jitters over Powell's job security. However, Powell has said he wouldn't leave if asked by the president, Politico reported, and that the president has no authority to fire him. Federal law only allows such a move "for cause," according to Politico. Trump's disagreement with Powell over rates apparently wouldn't meet that definition. The dollar hit new three-year lows and gold hit all-time highs this morning while volatility rose, some of this related to trade uncertainty as China warned other countries not to team up with the U.S. against it, but also jitters over Powell's status.
On the move
- Eli Lilly (LLY) slipped 0.5% after jumping 14% last Thursday on positive results for its obesity pill. The company's GLP-1 in pill form had similar safety in trials to injectable drugs, Eli Lilly said. A once-a-day pill would add convenience, and Lilly said it will seek approval from the U.S. Food and Drug Administration (FDA) by later this year for the drug, orforglipron.
- Netflix (NFLX) climbed 1.1% ahead of the open following its earnings report released late Thursday. The streaming company beat earnings per share estimates easily, but revenue was about as expected. It also guided for second quarter revenue and EPS above consensus views and kept full-year guidance.
- Bitcoin (/BTC) surged 2.8% this morning and crypto-connected stock MicroStrategy (MSTR) added 3% despite falling stocks and rising Treasury yields. The Wall Street Journal reported today that several crypto firms plan to apply for bank charters or licenses.
- Tesla, which reports earnings tomorrow, slipped 4% ahead of today's open after Reuters reported that the company aims to delay the U.S. launch of a more affordable Model Y. Tesla also saw its price target lowered by Barclays.
- Nvidia (NVDA) fell 3% ahead of the open, hurt like other semiconductor stocks by continued trade tensions between China and the U.S. Nvidia's CEO Jensen Huang met with Chinese leaders last week and the Japanese prime minister today, Barron's reported.
- Boeing (BA) fell 1.4% after news that China had returned a Boeing aircraft that had been intended for use by a Chinese airline. This comes after Trump raised tariffs on Chinese imports to 145% earlier this month, paralyzing trade relations.
- Hertz (HTZ) fell 10% in pre-market trading, but this came after sharp gains the previous two sessions after Bloomberg reported that Bill Ackman's Pershing Square Capital had amassed a nearly 20% stake.
- Capital One Financial (COF) rose nearly 5% and Discover Financial Services (DFS) climbed 7% after two top U.S. banking regulators approved Capital One's $35.3 billion all-stock bid to buy Discover, Barron's reported.
- Chances of a May rate cut stood at 10% early today, down from 20% a week ago. June rate cut odds have fallen to 69% from 75% over the last week. Though recent inflation data showed progress, the Fed worries that tariffs could force prices higher. And there's no sign of any cracks in the labor market. Powell isn't scheduled to speak this week, but several other Fed policy makers are, including Vice Chair Philip Jefferson tomorrow.
More insights from Schwab

Dividend discussion: In turbulent times like these, many investors preparing for retirement turn to dividend-paying stocks. In the latest Schwab OnInvesting podcast, Schwab Chief Investment Strategist Liz Ann Sonders and Schwab's Jones discuss the complexities of retirement investing, and the current state of the markets. They focus on volatility, investor confidence, and the impact of trade policy.
Resources for volatile markets
Turbulent market conditions can make anyone worried about their portfolio, and Schwab offers several perspectives that provide ideas to keep in mind at such times:
Market Volatility: What to Do During Turbulence
Bear Market: Now What?
Market Volatility in Retirement: Are You Prepared?
Navigating the Markets: Tariffs and Trade
Chart of the day

Data sources: FTSE Russell, Nasdaq, S&P Dow Jones Indices. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
The Russell 2000® (RUT—candlesticks) small-cap index eked out slight gains during the shortened week ended last Thursday, coming in ahead of both the S&P 500 Equal Weight Index (SPXEW—purple line) and the Nasdaq-100® (NDX—blue line). Though the Russell 2000 has struggled mightily over the last year, down 3.46% during that time period and trailing the other two, it made some decent daily gains last week even as the rest of the market struggled. Though there's no guarantee, small caps are sometimes the first area of the market to see positive activity when there's a turn away from negative sentiment.
The week ahead
