Key points:

  • Quarterly reports from major corporations are expected: Microsoft, Apple, Meta and Amazon.
  • Amid the Fed meeting, investors are waiting for a signal about a possible interest rate cut in September.
  • Labor market data is expected to give an idea of ​​the state of the economy and the Fed’s next steps.

Following a hectic trading session on Monday, the S&P 500 index is showing slight growth. Investors are tensely awaiting the most important events of the week: the publication of financial reports from major technology companies, the Federal Reserve’s decision on the key rate and the release of key data on the US labor market.

At the same time, the Dow Jones Industrial Average index closed with a slight decrease of 49.41 points (0.12%), stopping at 40,539.93. The S&P 500 index, on the contrary, added 4.44 points (0.08%), reaching 5,463.54. The Nasdaq Composite index also demonstrated positive dynamics, increasing by 12.32 points (0.07%) and closing at 17,370.20.

Tech giants report: what to expect?

Quarterly earnings reports from giants like Microsoft, Apple, Meta, and Amazon are expected to shed light on the future of the tech sector. The results from these companies could determine whether the recent positive momentum will continue or whether tech stocks will be vulnerable.

Meta Platforms announced Monday the launch of a new platform called AI Studio, designed to create, distribute, and grow customized AI-powered chatbots. AI Studio will allow users to build their own AI-powered virtual characters. Of particular interest will be the technology’s application for Instagram content creators, who will be able to use AI characters as their virtual representatives to automatically handle common questions in direct messages and respond to stories.

Research published Monday found that Apple has chosen Google’s chips over market-leading Nvidia to develop two fundamental components of the AI ​​software infrastructure for its upcoming AI products. Apple’s decision leaves a significant mark on the market, given that Nvidia is the undisputed leader in AI processors. Even though Nvidia’s market share is around 80% and includes chips made by Google, Amazon.com and other cloud providers, Apple made a strategic decision to favor Google.

Consumer discretionary was the biggest gainer among all S&P 500 sectors, led by Tesla, which rose after a positive review from Morgan Stanley. In contrast, energy was the worst performer, losing 0.9% due to lower oil prices.

McDonald’s shares fell 3.7% at the end of the trading session, after the company said its $5 meal promotion, launched in late June, was proving popular with customers looking to save money on more expensive menu items. Despite the popularity of the promotion, the company reported an unexpected decline in sales, its first in 13 quarters.

The crypto market is also showing high volatility. Coinbase Global and mining companies Riot Platforms and Marathon Digital closed significantly lower, despite a brief rally earlier in the day, driven by higher Bitcoin prices.

Economic data: interest rate decision and unemployment report

The investment community is eagerly awaiting the outcome of the Federal Reserve meeting on Wednesday. Investors are hoping that the Fed will signal its willingness to cut interest rates in September. On Friday, the focus will be on the July nonfarm payrolls report, as investors will look for signs of possible weakening in the labor market.

Experts say this week is a key week for financial markets, with important economic data including the Fed decision and the employment report. Investors are also closely watching earnings reports from major tech companies.