This week is all about the American pocketbook, with a new jobs report offering a view of the labor market and earnings from food and travel giants shedding light on how people are spending. April jobs data, due Friday, could help clarify whether March’s jump in hiring was an anomaly or the beginning of a trend. Employers added more jobs than expected in March, breaking from months of relatively low hiring and firing. Many companies have avoided shaking up their workforces too much while waiting to see how the economy reacts to tariffs, an immigration crackdown, and rising energy prices brought on by war with Iran. The Fed will also be watching the job market as it plots its next interest-rate moves.
Big tech companies dominated last week’s earnings headlines. This week, attention shifts to consumer goods and services companies ranging from The Walt Disney Co. to Wendy’s. Americans, especially higher-income households, have continued spending, despite feeling downbeat about the economy in recent months.
Consumer spending fuels the majority of economic growth in the U.S., and economic activity—as measured by GDP—came in below expectations last quarter. Investors will be on the lookout for signs that consumers are cutting back. Results from Marriott International and Airbnb may shed light on how rising airfares and gas prices are impacting travel. Earnings from fast-food companies, including the parent company of Burger King, are slated to land as the industry grapples with sluggish demand from lower-income customers.
What analysts are saying about U.S. stocks
Evercore ISI: “Remain fully invested, tilted to large-cap tech as NDX multiples remain attractive vs. SPX. Tech has outperformed off the 3/30 trough; Info Tech and Comm. Svcs. are the only two sectors to outperform since the “AI Revolution” bull began. As in 1999, the sectors that led the structural bull are set to do so again in 2026. Yet unseen “full-on FOMO chase” consistent with prior peaks, could catalyze an overshoot to SPX 9,000 bull case. Some of the most explosive price action lies ahead as generational IPOs could further rouse the animal spirits.”
RBC Capital Markets: “Our analysis suggests that there is still some room for the broader U.S. equity market to run before the highs that ended up being a ceiling are seen again. The bottom-up market cap-weighted S&P 500 NTM P/E is trading a bit above 25x, still well below its high of more than 28x seen last year.”
Morgan Stanley: “Equity index returns are historically strong (mid-teens range) over a 12-month period when the Fed is on hold and earnings growth is above the long-term median (8%). Index upside is only slightly stronger (high-teens range) when the Fed is cutting and earnings growth is above the long-term median. The bottom line is that a strong earnings backdrop, which we expect over the next 12 months, is the main driver of upside in both outcomes. The near-term risk from the Fed is more related to liquidity tightness if they were to underestimate how much capital the real economy is now using for investment and the rolling recovery. Markets could periodically reflect this risk via higher bond volatility and/or tension in funding markets. A stronger dollar could also play a role in this dynamic.”