This week, US stocks will see two key events: the Federal Reserve's July interest rate decision and the earnings reports of several large technology companies. The market generally expects interest rates to remain unchanged for now, but rising oil prices are influencing future policy expectations, and the investment and profitability of technology companies in AI are also becoming a focus of trading.
Two major focuses this week
Investors are focusing on companies including Amazon, Meta, Microsoft, Apple, and Qualcomm. This round of earnings reports will not only affect companies' quarterly performance but also influence market valuations of large-cap tech stocks.
Based on current expectations, simply exceeding earnings expectations may not be enough to further drive up stock prices. The market is more concerned with whether the investments made by large technology companies in AI can lead to a clearer profit outlook.
Interest rate decision on July 29 will be closely watched.
The market expects the Federal Reserve to keep interest rates unchanged at 3.5% to 3.75% at its policy meeting on July 29. However, rising oil prices may prompt investors to reassess the likelihood of further rate hikes.
- The expected interest rate range is 3.5% to 3.75%.
- Rising oil prices may increase expectations for further interest rate hikes.
- Policy statements will still affect risk appetite.
AI spending becomes a highlight of financial reports.
Another key aspect of tech earnings season is balancing the scale of AI spending with the speed of returns. Even if revenue or profit exceeds expectations, stock prices may still come under pressure if the market perceives previous expectations as overly optimistic.
The market reaction following Intel's recent earnings report is a case in point. The article notes that even if earnings exceed expectations, the stock price may still fall if investors believe the positive news has already been priced in.
This means that this week, the market's assessment of large technology companies will not only focus on the financial figures themselves, but also on how management explains AI investments, profit margins, and the pace of future growth.
