Wall Street is bracing for a crucial week, with investors closely monitoring the US Federal Reserve’s interest rate decision, quarterly earnings from major technology companies and a series of economic data releases.
The Federal Open Market Committee (FOMC) will hold its two-day monetary policy meeting, with the rate decision scheduled for Wednesday. Investors will also assess the first estimate of third-quarter gross domestic product (GDP) and October core Personal Consumption Expenditures (PCE) inflation data.
Fed Interest Rate Decision in Focus
The Federal Reserve’s policy announcement will be the main market driver this week. The central bank raised interest rates in September for the first time since 2023 to tackle persistent inflation.
However, Fed funds futures on Friday indicated less than a 10% probability of another rate hike at Wednesday’s meeting, according to LSEG data. Analysts expect a possible increase at the December meeting.
The Fed continues to express concerns about inflation remaining above its target. Meanwhile, weakening consumer confidence and emerging signs of stress in the labour market have complicated the economic outlook.
Investors will examine the central bank’s statement for clues about its future policy direction.
GDP, Inflation and Consumer Data on Radar
Markets will closely track Thursday’s first estimate of third-quarter GDP to assess the pace of US economic growth.
The October core PCE price index, a key inflation gauge monitored by the Fed, will also attract attention. Other releases include consumer confidence, new home sales, personal income and spending, personal consumption data and the Employment Cost Index.
The indicators could influence expectations for future interest rate decisions and shape investor sentiment ahead of the November 3 US midterm elections.
Alphabet, Microsoft and Amazon to Report Earnings
Corporate earnings will provide another major market catalyst. Google parent Alphabet and Microsoft are scheduled to announce results on Wednesday, followed by Amazon on Thursday.
Investors will scrutinise artificial intelligence (AI) spending, cloud computing growth and returns on substantial data-centre investments.
Other companies reporting results include Visa, Coca-Cola, Boeing, UPS, Eli Lilly, Mastercard, Intel, Merck, Caterpillar, Shell, ExxonMobil, Chevron, BP, AbbVie, Verizon, T-Mobile US, Chipotle, eBay and GE Vernova.
Their earnings could offer insights into consumer demand, industrial activity, healthcare spending and energy market conditions.
Rising Oil Prices Pressure US Stocks
US equities ended lower on Friday as crude oil prices surged. Brent crude, the international benchmark, rose 3.1% to above $116 a barrel, its highest level since June 2022.
The S&P 500 declined 39.75 points, or 0.5%, to 7,623.68. The Dow Jones Industrial Average dropped 652.82 points, or 1.2%, to 52,215.16, while the Nasdaq Composite fell 53.52 points, or 0.2%, to 25,955.34.
Investors will weigh the Fed’s guidance, corporate earnings and economic data against persistent inflation, oil supply concerns and global trade tensions to assess the outlook for US markets.
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