Stocks waver in wait for key earnings, Fed meeting kickoff

July 30, 2024

3 minutes read

US stocks wavered on Tuesday as investors awaited more key earnings from the likes of Microsoft (MSFT) and the Federal Reserve started its rate-setting policy meeting.

The S&P 500 (^GSPC) rose slightly while the tech-heavy Nasdaq Composite (^IXIC) fell 0.2%, on the heels of a lackluster session for the major gauges. The Dow Jones Industrial Average (^DJI) rose 0.4%.

Stocks are in the midst of a potentially pivotal week featuring the Fed’s decision, the July jobs report, and results from four of the “Magnificent Seven” megacaps. All will be crucial for investors wondering whether the recent stock pullback is over, as they weigh high expectations for interest-rate cuts against concerns that Big Techs have lost their mojo.

Eyes are now on Microsoft’s quarterly report due after trading ends, which will set the stage for results from Apple (AAPL), Amazon (AMZN), and Meta (META) in the following days.

Wall Street is watching closely for any sign that massive AI investments are starting to pay off. It’s especially in focus after July’s volatile ride for stocks underlined the risks of the AI trade, as investors rotated out of Big Tech and into small caps.

Pharmaceuticals Merck (MRK) and Pfizer (PFE) posted quarterly results prior to the market open, as well as consumer products giant Procter & Gamble (PG). Coffee-shop chain Starbucks (SBUX) will report after the market close, as will chip giant AMD (AMD).

A notable theme has emerged this earnings season — a willingness by investors to support companies that post weak results but outline a turn in their business coming soon.

Meanwhile, the Fed began its July policy meeting on Tuesday. Policymakers are expected to bring no change in borrowing costs on Wednesday but to lay the groundwork for a rate cut in September. After encouraging June inflation data, the market debate now centers on the timing and number of cuts this year.

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Tue, July 30, 2024 at 3:10 PM GMT+1

Job openings steady in June while quits hit lowest level since November 2020

Job openings were roughly flat in June, declining slightly from the month prior as investors had been watching for further signs of cooling in the labor market.

New data from the Bureau of Labor Statistics released Tuesday showed that 8.18 million jobs were open at the end of June, a decrease from the 8.23 million job openings in May.

May’s figure was revised higher from the 8.14 million open jobs initially reported. Economists surveyed by Bloomberg had expected the report to show 8 million openings in June.

The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.3 million hires were made during the month, a slight decrease from May. The hiring rate declined to 3.4%, down from 3.6% in May.

Also, in Tuesday’s report, the quits rate, a sign of confidence among workers, sat at 2.1% for the second straight month. In June, there were 3.28 million quits, the lowest number of quits in a month since November 2020.
Tue, July 30, 2024 at 2:32 PM GMT+1

Stocks rise as Fed meeting set to kick off, investors await Microsoft earnings

Stocks rose on Tuesday morning as investors digested more earnings and Fed officials were set to commence their two-day policy meeting.

The S&P 500 (^GSPC) nudged higher 0.2% while the tech-heavy Nasdaq Composite (^IXIC) rose 0.3% after a lackluster prior session for the major gauges. The Dow Jones Industrial Average (^DJI) rose 0.2%.

Pharmaceutical giant Pfizer (PFE) raised its annual forecast, while Merck (MRK) beat second quarter earnings estimates.

Investors will watch for Microsoft (MSFT) quarterly earnings due after the market close on Tuesday. Coffee giant Starbucks (SBUX) will also post results following the close.

This is a big week for the markets as the Federal Open Market Committee holds its two-day meeting with a rate decision due on Wednesday afternoon. Investors expect Fed officials will lay the groundwork for a September cut.

Meanwhile the monthly jobs report is due on Friday prior to the market open.