What to watch globally next week: The Federal Reserve’s decision and AI giant’s financial reports are coming, U.S. stocks are ushering in a “super week”

What to watch globally next week: The Federal Reserve’s decision and AI giant’s financial reports are coming, U.S. stocks are ushering in a “super week”.

Financial Associated Press, July 26 (Editor Xia Junxiong) This week, the three major U.S. stock indexes all recorded weekly declines. The S&P 500 index fell by 0.61%, the Nasdaq fell by 2.13%, and the Dow fell by 0.38%. After a volatile week, the U.S.

stock market will face two major tests in the coming week: First, the Federal Reserve meeting, from which the market hopes to find clues about the future path of interest rates; second, the intensive release of corporate financial reports, among which the performance of technology giants and leading artificial intelligence companies has received the most attention.

Three major central banks announce interest rate decisions The Federal Reserve will announce its interest rate decision next Wednesday and is expected to keep the federal funds rate target range unchanged at 3.50% to 3.75%.

Market attention will be on the accompanying statement for clues on whether the Federal Reserve may raise interest rates by 25 basis points at its next meeting in September. LESG data shows that U.S. currency markets have now fully priced in this possibility.

"If the market feels that more and more Federal Open Market Committee (FOMC) members start to support multiple rate hikes throughout the rest of the year, then that will be a problem for the market," said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. U.S.

second-quarter gross domestic product data will be released on Thursday, along with the Fed's preferred inflation measure, the June personal consumption expenditures price index, and weekly initial jobless claims.

The Bank of England will announce its monetary policy decision on Thursday, and the market is generally expected to keep interest rates unchanged at 3.75%. The Bank of Japan will conclude its two-day policy meeting on Friday.

The Bank of Japan is widely expected to keep monetary policy unchanged as policymakers are still assessing the impact of the latest rate hike. Previously, the Bank of Japan had raised its policy interest rate to 1%.

AI giant faces financial reporting "big test" About one-third of S&P 500 companies will report results in the coming week, making it the busiest week of the second-quarter earnings season. These include tech giants such as Apple, Microsoft, Amazon and Meta, as well as heavyweights such as Visa, Chevron and Coca-Cola.

(What to watch in next week’s financial report) Since 2026, the U.S. stock market has been showing a pattern: technology giants that invest heavily in artificial intelligence (AI) are punished, while semiconductor manufacturers are sought after.

This pattern has continued to be reflected in Alphabet's financial report this week, and may also affect the market's reaction to Microsoft, Amazon and Meta's financial reports next week. On the surface, Alphabet delivered a solid financial report this week, but its capital expenditure plans and free cash flow turned negative, unnerving investors.

Google's stock price fell nearly 8% this week.

Ken Mahoney, CEO of Mahoney Asset Management, said: "What investors are really worried about is that these companies are investing all their cash flow into areas such as artificial intelligence and data centers, leaving little money left for shareholders to repurchase shares or pay dividends." He added: “And in these financial reports, except for the conceptual description, you still don’t hear the return on these investments.” In addition to the U.S.

technology giants, several storage giants with strong stock price performance this year will also announce financial reports next week, including South Korea's SK Hynix, Samsung Electronics and Japan's Kioxia. These companies have benefited from the huge expenditures of ultra-large-scale cloud manufacturers. Next month is also the last trading week in July.

In midterm election years, August and September have historically been the S&P 500's worst two months of the year, with average declines of 0.4% and 0.8%, respectively, according to the Stock Trader's Almanac.

Overview of important overseas economic events next week (Beijing time): Monday (July 27): German IFO business climate index in July, US Dallas Fed business activity index in July, US durable goods orders monthly rate in June Tuesday (July 28): U.S. FHFA house price index monthly rate in May, U.S. Conference Board consumer confidence index in July, U.S.

Richmond Fed manufacturing index in July Wednesday (July 29): EIA crude oil inventories in the United States for the week to July 24, SK Hynix releases Q2 financial report Thursday (July 30): The Federal Reserve FOMC announced the interest rate resolution, Federal Reserve Chairman Warsh held a monetary policy press conference, the Bank of England announced

the interest rate resolution, meeting minutes and monetary policy report, the Bank of Canada announced the monetary policy meeting minutes, the initial value of the German/Eurozone GDP annual rate in the second quarter, the US core PCE price index in June, and the initial value of the US real GDP annualized quarterly rate in the second quarter.

Friday (July 31): The Bank of Japan announces its interest rate decision and economic outlook report, Bank of Japan Governor Kazuo Ueda holds a monetary policy press conference, Eurozone CPI in July, and the final value of the University of Michigan Consumer Confidence Index in the United States in July

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