Stocks rebounded last week as tech earnings sparked a rally in markets, despite concerns about the Fed holding interest rates higher for longer. The Nasdaq Composite rose over 4%, the S&P 500 jumped almost 3%, and the Dow Jones Industrial Average increased less than 1%.
In the upcoming week, investors will be closely watching the Fed meeting, the April jobs report, and earnings from tech giants like Apple and Amazon. Updates on job openings, manufacturing and services sector activity, and consumer confidence will also be on the agenda.
The Fed is expected to announce its decision on interest rates on Wednesday, with Chair Jerome Powell holding a press conference afterward. Investors will be listening for clues on how the Fed views recent inflation data, as higher-than-expected inflation numbers have tempered rate cut expectations.
Meanwhile, the April jobs report is expected to show 250,000 nonfarm payroll jobs added to the US economy, with the unemployment rate holding steady at 3.8%. Economists remain optimistic about the labor market’s strength, which is crucial for maintaining economic growth in a higher interest rate environment.
Big Tech earnings will continue to drive market sentiment, with mixed reactions seen so far. Meta’s stock fell after weak guidance, while Alphabet’s stock soared on strong earnings and dividend announcements. This week, all eyes will be on Apple and Amazon as they report their earnings.
Overall, the earnings season has been positive, with companies beating expectations on earnings per share and revenue. However, investors are looking for more than just beats and are seeking long-term growth prospects from companies to drive stock performance. Profit margins are increasing, providing a silver lining amid sticky inflation and high interest rates.