Wall Street Rebounds Ahead of FOMC & Big Tech Earnings
On Tuesday, Wall Street showed resilience despite ongoing summer volatility, as stocks rallied off morning lows. Key factors aiding this recovery included a significant drop in oil prices amid a lull in military tensions between the U.S. and Iran and a positive outlook indicated by flash PMI data showcasing robust expansion in U.S. manufacturing and services sectors. The S&P 500 Index is now less than 3% from its all-time highs, while the tech-heavy Nasdaq 100 Index ETF (QQQ) briefly entered correction territory, defined as a 10% decrease from all-time highs, before recovering losses.
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Wednesday is set to be pivotal, with major tech companies Microsoft (MSFT) and Meta Platforms (META) reporting their earnings after market close. Investors are particularly interested in their capital expenditure guidance, especially following substantial post-EPS movements in Tesla (TSLA) and Alphabet (GOOGL). Additionally, there’s speculation about the Federal Reserve potentially raising interest rates, although betting markets suggest an 80% probability of no change. This combination of earnings reports and Fed decisions is likely to create further market volatility.
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