Hundreds of US companies are lined up to report how much profit they made during the spring, with nearly a third of all the businesses in the S&P 500 index scheduled to deliver updates. That includes market heavyweights Apple, Amazon, Meta Platforms and Microsoft. Those companies have grown so huge that their stock movements can almost dictate what the overall S&P 500 index does. Microsoft alone is worth roughly $US3.8 trillion.
On Wednesday, the Federal Reserve will announce its latest decision on interest rates.
Trump has been angrily calling for the Fed to cut interest rates, a move that could give the economy a boost. But Fed Chair Jerome Powell insists that he wants more data about how Trump’s tariffs are affecting the economy and inflation before the Fed makes its next move. Lower interest rates can fuel inflation, and the economy only recently came out of its scarring run where inflation briefly topped 9 per cent.
The widespread expectation on Wall Street is that Fed officials will wait until September to resume cutting interest rates, though a couple of Trump’s appointees could dissent in the vote. The Fed has been on hold with interest rates this year since cutting them several times at the end of 2024.
This week will also feature several potentially market-moving updates about the economy. On Tuesday will come reports on how confident US consumers are feeling and how many jobs openings US employers were advertising. Wednesday will show the first estimate of how quickly the US economy grew during the spring, and economists expect to see a slowdown from the first three months of the year.
On Thursday, the latest measure of inflation that the Federal Reserve prefers to use will arrive. A modest reading could give the Fed more leeway to cut interest rates in the short term, while a hotter-than-expected figure could make it more cautious.
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And Friday will bring an update on how many more workers US employers hired during June than they fired.
Treasury yields held relatively steady in the bond market ahead of all that action. The yield on the 10-year Treasury edged up to 4.41 per cent from 4.40 per cent late Friday. The two-year Treasury yield, which more closely tracks expectations for Fed action, rose to 3.92 per cent from 3.91 per cent.
In stock markets abroad, indexes dipped in Europe following the announcement of the trade deal’s framework.
Chinese stocks rose as officials from the world’s second-largest economy prepared to meet with a US delegation in Sweden for trade talks. Stocks climbed 0.7 per cent in Hong Kong and 0.1 per cent in Shanghai.
Indexes were mixed across the rest of Asia, where Japan’s Nikkei 225 fell 1.1 per cent for one of the world’s bigger losses.
AP
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