Last week saw the stock market on a positive trajectory for the second consecutive week, with major indexes recovering from the April 2 tariff announcement. The question on everyone’s mind is whether the upward trend will continue for a third week.
S&P 500’s Impressive Winning Streak
The S&P 500 has shown a remarkable two-week surge, experiencing gains for nine consecutive days until Friday. This streak marks the longest winning streak for the large-cap benchmark since 2004. However, the winning streak came to an end on Monday as the S&P 500, Dow Jones, Nasdaq, and Russell 2000 all saw a slight decline.
Tariffs and Market Impact
Tariffs continue to play a significant role in shaping the macroeconomic landscape and influencing stock market movements. The latest development involves a proposed 100% tariff on foreign-made movies. Despite initial concerns, the White House clarified that no final decisions on foreign film tariffs have been made.
FOMC Meets Tuesday and Wednesday
This week, all eyes are on the Federal Reserve’s Federal Open Market Committee (FOMC), which is scheduled to meet on Tuesday and Wednesday to discuss interest rates. While the labor market remains robust and inflation has been contained, there is little expectation for a rate cut at this meeting due to prevailing economic uncertainties and tariff-related concerns.
The CME FedWatch survey, which gauges interest rate traders’ expectations, indicates that 97% of respondents anticipate the Fed to maintain rates within the current range of 4.25% to 4.50%. Most traders (71%) also predict that rates will remain unchanged even after the June meeting. Looking ahead, the July 25 FOMC meeting is being closely watched for a potential rate reduction, with 56% of traders forecasting a 25-point cut and 18% expecting a 50-point reduction.
Palantir Leads Busy Week for Earnings
As first-quarter earnings season unfolds, one of the most eagerly awaited reports this week is from Palantir Technologies (NASDAQ:). The company, last year’s top-performing large-cap stock, is set to announce its earnings after the market closes on Monday.
Analysts are projecting earnings of 13 cents per share for Palantir, which has seen a remarkable 64% year-to-date increase and an astounding 435% surge over the past 12 months. Additionally, other notable companies reporting earnings this week include Marriott (NASDAQ:), AMD (NASDAQ:), Walt Disney (NYSE:), Flutter Entertainment (NYSE:), Coinbase Global (NASDAQ:), DraftKings (NASDAQ:), and Affirm Holdings (NASDAQ:).
With a diverse range of companies reporting earnings and the FOMC meeting on the horizon, the upcoming week is poised to be a pivotal one for investors and market watchers alike.
Analysis:
In summary, the recent stock market movements, tariff-related developments, and upcoming FOMC meeting provide valuable insights into the current economic landscape. Investors should closely monitor earnings reports from key companies like Palantir Technologies and stay informed about potential rate changes by the Federal Reserve. By staying abreast of these developments, individuals can make informed decisions regarding their investments and financial future, ensuring they are well-prepared for any market fluctuations.