Wall street outlook: 5 factors that could shape the week ahead

Wall Street is looking at a volatile week ahead as US President Donald Trump’s latest tariffs on China is expected to increase the uncertainties among investors.

The ongoing government shutdown is already testing the nerves of the market, and adding geopolitical tensions to that will work as a perfect recipe for a storm.

Q3 earnings reports will further change the dynamics with big banks such as JPMorgan Chase, Citigroup, and Wells Fargo all set to share their performance next week.

5 factors that could shape the Wall Street week ahead

1. US President Donald Trump made a major announcement on Friday as he decided to impose additional 100% tariffs on China, taking the world back to a sort of trade war situation.

China is yet to respond officially to the additional US tariffs, but the Asian country has signaled a tough approach in the past few days.

This hike raises the total US tariffs on Chinese goods to around 130%.

The move is a response to China’s recent export restrictions on rare earth minerals, crucial for tech, defense, and electric vehicle industries.

To add more to the conflict, Donald Trump has also announced export restrictions on critical software. The announcement, which came late on Friday, shook the global markets with Wall Street indices shedding upto 900 points.

2. The US government has been in a shutdown since October 1, and it’s starting to hit federal workers hard.

About 900,000 employees have been furloughed, and another 700,000 are having to work without pay while the budget deadlock drags on.

Things took a sharper turn recently when the Trump administration started issuing mass layoffs, sending reduction-in-force notices to over 4,000 federal workers across agencies like Treasury and Health and Human Services.

As negotiations remain stuck, President Trump has blamed Democrats for both the shutdown and the layoffs, calling the job losses “Democrat-oriented” amid all the economic uncertainty.

3. Next week is a big one for the US earnings season. Major banks like JPMorgan Chase and Citigroup will start releasing their reports, and investors will be watching closely for any signs about the health of the economy.

Analysts are expecting the S&P 500 to show around 8% year-over-year earnings growth, which would continue its recent streak.

It’s not just the banks; companies across tech, finance, and industrials, including Goldman Sachs and Bank of America, are also set to report.

Traders will be paying attention not just to the numbers, but also to what companies say about the future, especially with trade tensions and the government shutdown potentially affecting consumer spending and corporate outlooks.

4. The investors on Wall Street continue to operate in the dark as the release of economic data remains suspended due to the ongoing shutdown in Washington.

Key federal agencies like the Bureau of Labor Statistics and the Census Bureau have suspended operations, delaying critical reports, including the monthly jobs and Consumer Price Index data.

Next week, critical data is scheduled to be released like retail sales, producer price index, industrial production numbers etc, but as the deadlock between White House and Congress continues, the traders have manage without any signals from the economy.

5. The crypto market took a huge hit this week, losing over $19 billion in leveraged positions after President Trump announced a 100% tariff on Chinese goods.

Bitcoin dropped more than 8%, briefly falling to around $102,000 before bouncing back to $113,000.

Ethereum and other major altcoins weren’t spared either; XRP, for example, fell by over 22%.

This wild sell-off really showed how closely crypto markets are tied to Wall Street. Fear and uncertainty in traditional markets are spilling over into digital assets.

While some people see it as just a market correction, it’s a clear reminder of how sensitive crypto can be to big geopolitical and economic shocks.

The post Wall street outlook: 5 factors that could shape the week ahead appeared first on Invezz