U.S. stocks face dual tests of Federal Reserve decision and technology earnings report
As new chairman Kevin Warsh advances monetary policy communication reforms, some institutions have warned that they cannot rule out the possibility of a "surprise interest rate hike." The U.S. stock market has experienced a volatile decline recently, with the S&P 500 index being dragged down by the poor financial performance of Alphabet and Tesla. Investors are paying close attention to the upcoming Federal Reserve interest rate decision and the second-quarter earnings reports released by major technology giants. The overall risk aversion in the market is strong.
As new chairman Kevin Warsh advances monetary policy communication reforms, some institutions have warned that they cannot rule out the possibility of a "surprise interest rate hike." The U.S. stock market has experienced a volatile decline recently, with the S&P 500 index being dragged down by the poor financial performance of Alphabet and Tesla. Investors are paying close attention to the upcoming Federal Reserve interest rate decision and the second-quarter earnings reports released by major technology giants. The overall risk aversion in the market is strong. The Federal Reserve is about to hold a policy meeting, and the market is generally expected to keep interest rates unchanged this time, but federal funds futures still show a 38% probability of raising interest rates. As new chairman Kevin Warsh advances monetary policy communication reforms, some institutions have warned that they cannot rule out the possibility of a "surprise interest rate hike." The intensified tensions in the Middle East have caused Brent crude oil prices to exceed US$100 per barrel, and the market has intensified concerns about a rebound in inflation. Meanwhile, the yield on the benchmark 10-year U.S. Treasury note has hit a high of over 4.7%, further increasing financing costs for companies and squeezing stock market valuations. This week will usher in the busiest week of the second-quarter earnings season, with about one-third of the S&P 500 index companies releasing results, including industry giants such as Apple, Visa, Chevron and Coca-Cola. After Alphabet announced increased investment in AI, the market was divided on whether it could recover costs in the short term. AI giants such as Microsoft, Amazon and Meta will announce their results one after another, and investors will be cautious about their high investments in AI infrastructure.