US Stocks Fluctuate Ahead of Big Tech Earnings, Fed Decision
US stock futures experienced mixed movements as investors anticipated earnings reports from three major tech companies and the Federal Reserve's interest rate decision.
Tech Stocks
Contracts for the Nasdaq 100 remained relatively flat, while S&P 500 futures declined by 0.2%. Premarket trading witnessed a 7% surge in T-Mobile US Inc. shares, attributed to positive results. However, other prominent tech stocks like Nvidia Corp, Apple Inc., and Microsoft Corp. saw downward trends.
Earnings Spotlight
Traders will closely monitor earnings announcements from Microsoft, Meta, and Tesla for indications of weakness, particularly in light of the disruption caused by Chinese startup DeepSeek's affordable AI model.
Fed Meeting
While expectations point towards the Fed maintaining interest rates, Chair Jerome Powell is likely to face questions regarding the inflationary impact of potential trade tariffs and other White House policies.
Bond Market
The yield on 10-year Treasuries remained stable at 4.53%. Investors are speculating on a possible rate cut in March, boosted by the latest client survey from JPMorgan Chase & Co., indicating the largest net long position in US government debt in almost 15 years. Federated Hermes Inc. is also extending maturities in its money market funds, suggesting anticipation of further easing measures.
Central Bank Actions
Other central banks may adopt dovish stances, including the Bank of Canada's expected quarter-point rate reduction on Wednesday. The European Central Bank is also anticipated to announce a cut.
Tech Earnings Outlook
Despite continued revenue growth for the "Magnificent Seven" tech giants, the pace of expansion is projected to be the slowest in nearly two years. The market is now scrutinizing these companies' investments in artificial intelligence and their return on technology.
Corporate Highlights
* Microsoft and OpenAI are investigating unauthorized data access by a group connected to DeepSeek.
* Apple and SpaceX are collaborating to integrate Starlink into upcoming iPhone software.
* Novo Nordisk's Ozempic has received US approval for treating kidney disease in type 2 diabetes patients.
* Sony has named Hiroki Totoki as CEO, effective April 1.
* American Axle & Manufacturing Holdings Inc. will merge with UK-based Dowlais Group Plc.
Key Events This Week
* US Fed rate decision (Wednesday)
* Earnings reports from Tesla, Microsoft, Meta, and ASML (Wednesday)
* Canada rate decision (Wednesday)
* Eurozone ECB rate decision, economic data release (Thursday)
* US GDP, economic data release (Thursday)
* Earnings reports from Apple and Deutsche Bank (Thursday)
* US personal income and spending, inflation data, employment statistics (Friday)