Following on from this morning's article where we said "this week could see speculators see past the macroeconomic outlook," and now after today's trade we can see US tech was bought ahead of earnings. This week does not feel like macro (economic) vs micro (stocks) story but leaning more towards a micro stock story with big tech earnings this week, along with Anthropic, a company that is already well interconnected into the infrastructure of all the other big tech names becoming public for its shares to float on the NASDAQ. This current hyped narrative into the future bet of enterprise and technology is overshadowing higher oil prices with no resolution in Ukraine or the Middle East, the last CPI US inflation data that was slightly hotter than expected, and a market with 90% chance of an interest rate hold.
A possible scenario in this week's trade is... tomorrow the Fed does not come out with a surprise away from market consensus and do hold, say very little in the speech and leave the big tech earnings reports from Microsoft ticker name MSFT and Alphabet ticker name GOOGL after the bell to do the talking. With PCE the next day on Thursday, what if a world where it came in slightly hotter than expected and instead of the market risk appetite catching up with the macroeconomic reality, the FOMO for AI tech stocks continue and that dip get bought by the retail stock picker and the institutional funds .
US Equities Edge Higher Before Fed Decision
U.S. equities finished slightly higher in late trading as investors prepared for upcoming big tech earnings and the next Federal Reserve rate decision. The Dow Jones Industrial Average posted a slim 0.03 percent gain amid cautious trading, while European shares logged losses with the UK 100 slipping 0.73 percent by the close.
U.S. crude oil inventories pressed energy markets after falling less than expected and putting downward pressure on prices. Diesel refining margins dropped 7 percent as Russian output expanded, while Saudi Aramco offered discounted spot crude into European markets following a pipeline restart.
Single Stocks Slump on Earnings Misses
Enphase Energy led single-name volatility, tumbling over 10 percent after issuing weaker-than-expected forward guidance and Q3 results. Robinhood shares also slumped on a third-quarter revenue miss as crypto revenue dropped 55 percent, while Visa slid despite beating Q4 profit estimates due to slowing payment volume growth. On the policy front, Treasury Secretary Bessent identified crypto as a key strategic tool to maintain dollar dominance. Investors now watch upcoming megacap tech earnings and pending central bank decisions.
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