Earnings Season Poses New Test for Stock-Market Records

A barrage of tariff threats from President Trump didn't keep investors from driving stocks to fresh records this past week.

- Krystal Hur

The coming earnings season could make the trade war harder to ignore.

Strong corporate profits have helped the S&P 500 rebound from the depths of April's turmoil to a gain of 6.4% this year. The broad index notched fresh records in recent days even as the White House threatened tariffs on goods from a host of trade partners, including Brazil and Canada.

Now, the coming reports pose a fresh test. Investors are seeking clarity from corporate leaders about how the back-and-forth on trade has affected their businesses, worried it will hurt economic growth and corporate profits when stocks already look expensive relative to history.

"It's hard not to think that there hasn't been some head-in-the-sand type of euphoria in the markets," said Marta Norton, chief investment strategist at financial-services firm Empower. "My concern is that maybe there's more to it than people think."

In the week ahead, investors will parse results from banks including JPMorgan Chase, Wells Fargo and Citigroup. BlackRock, the world's largest asset manager, also reports earnings.