US stock index futures rose on Monday, kicking off a week that includes a Federal Reserve meeting and crucial results from major tech companies. Here’s what’s happening in the stock market today.
Wall Street indices rallied strongly on Friday after the PCE price index, the Federal Reserve’s favored inflation gauge, came in mostly in line with expectations in June, increasing optimism that the central bank may start cutting rates in September.
The S&P 500 rose about 1.1%, the NASDAQ Composite gained 1%, and the Dow Jones Industrial Average rose more than 650 points, up about 1.6%.
Federal Reserve Meeting Will Provide More Clarity on Rate Cuts
The US Federal Reserve is expected to leave interest rates unchanged at the end of its two-day meeting on Wednesday.
Any signal from the central bank about when it plans to start cutting interest rates will be closely watched, amid growing signs that inflation has cooled in recent months.
According to economists, recent comments from Fed policymakers indicate that they are likely to hold interest rates at their next meeting, but the likelihood of a rate cut has increased.
The main factor moving the FOMC closer to a cut is the positive inflation data for May and June. After firmer inflation figures in the first quarter, largely attributed to residual seasonality and typical month-on-month fluctuations, the second quarter saw considerable improvement in inflation data.
According to the CME FedWatch tool, traders expect a 25 basis point rate cut by the Fed in September.
Apple and Microsoft Report Earnings This Week
Microsoft (MSFT) and Apple (AAPL) will report their results on Tuesday and Thursday, respectively.
Other major technology companies such as Meta Platforms (META), Advanced Micro Devices (AMD), and Amazon (AMZN) will also release their results this week.
The results come after a long slide in technology stocks, as the sector was hit by profit-taking and rate cut expectations, causing investors to shift to more economically vulnerable sectors.
Alphabet’s (GOOGL) poor results last week also led to increased caution ahead of the technology sector’s results, with investors waiting to see if increased investment in artificial intelligence is paying off.
Looking ahead to Monday, earnings from fast-food giant McDonald’s (MCD) will be the most relevant.
Crude Oil Falls Despite Middle East Tensions
Crude oil prices fell on Monday despite concerns about the escalating conflict in the Middle East, which could impact global supply.
Israel and the United States blamed the weekend’s deadly rocket attack in the Israeli-occupied Golan Heights on Iranian-backed Hezbollah, which denied responsibility.
Israel vowed retaliation against Hezbollah in Lebanon, and Israeli aircraft bombed targets in southern Lebanon on Sunday.
These heightened tensions are also seen as diminishing the chances of a ceasefire between Israel and Hamas.
Nevertheless, the crude oil market remains weak as demand continues to be threatened by global economic fragility.
