What to Expect in the Markets This Week: Fed Rate Decision, Big Tech Earnings, and More

It will be a busy week for markets with big events in monetary policy and earnings from more than half of the Magnificent Seven companies.

Fed Rate Decision Comes as Officials Watch Employment Levels

Market watchers will be closely focused on Wednesday when the Federal Open Market Committee (FOMC) announces its latest decision on interest rates.

The Fed is widely expected to keep rates at the current level of 5.25% to 5.5%, with investors believing the central bank won’t take action on rates until its meeting in September. After the decision this week, Federal Reserve Chair Jerome Powell will take media questions.

The employment report on Friday comes as Federal Reserve officials are keeping a close eye on the labor market following a rise in unemployment last month. If Fed officials don’t surprise with an interest rate cut on Wednesday, the jobs report could indicate whether economic conditions are on track for a September rate cut.

Big Tech a Highlight of Earnings Calendar, Along With Oil, Pharmaceutical Firms

Investors will get another batch of earnings reports, with tech and energy firms in the spotlight this week.

On Tuesday, Microsoft will report earnings after it rode a 20% jump in cloud business revenue early this year to grow its quarterly net income by 33%. Then comes Meta Platforms’ report on Wednesday, after the Instagram parent offered weaker guidance for the latest quarter. On Thursday, Apple’s earning report will show whether it can continue to surprise analysts with its revenue growth, while Amazon looks to continue growing its advertising and cloud services.

On Friday, corporate earnings will focus on the energy sector, with ExxonMobil reporting its quarterly results after the oil giant missed on profit in the previous quarter and Chevron providing its financial update after that oil company posted lower revenue and net income in its prior report. BP, Shell, and ConocoPhillips report earlier in the week.

Earnings reports from McDonald’s on Monday and Starbucks on Tuesday will provide indicators on the health of the consumer, coming as McDonald’s reportedly will keep its $5 value meal promotion in August as customers continue to object to high prices.

Other noteworthy reports this week include the quarterly earnings from Boeing, its first since it pleaded guilty to charges it defrauded the government over a pair of crashes of its 737 Max planes. On Tuesday, pharmaceutical firms Merck and Pfizer are set to issue their quarterly financial updates.

Overall, it will be a week filled with important events and earnings reports that could have a significant impact on the markets. Investors will be closely watching the Fed rate decision and the employment report, as well as the earnings reports from big tech companies and other key players in various industries.

Stay tuned for updates and analysis as these events unfold throughout the week.