New York Stock Market Mixed Ahead of FOMC and Big Tech Earnings... Cryptocurrency Stocks Up

FOMC on 30-31... Likely to Hint at September Rate Cut
Big Tech Earnings to Be Released Starting with MS on the 30th

The three major indices of the U.S. New York stock market showed mixed trends in early trading on the 29th (local time). Investors remained cautious ahead of this week's Federal Open Market Committee (FOMC) meeting and big tech earnings releases.

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As of 9:55 a.m. at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was down 0.2% from the previous close, standing at 40,508.6. The large-cap-focused S&P 500 index was up 0.32% at 5,476.79, and the tech-heavy Nasdaq index was trading 0.82% higher at 17,500.53.

By individual stocks, McDonald's is up 2.6% despite news that its quarterly sales declined for the first time since 2020. Cryptocurrency-related stocks surged after former President Donald Trump, the Republican presidential candidate, said he would make the U.S. the "cryptocurrency capital" if he returned to the White House. Coinbase and Riot Platforms shares rose 3.3% and 2.54%, respectively.

Investor attention this week is focused on the FOMC meeting scheduled for the 30th and 31st. The U.S. Federal Reserve (Fed) is highly likely to keep the benchmark interest rate steady at 5.25?5.5% for the eighth consecutive time but is expected to provide clues for a rate cut in September. Recent easing of inflation and signs of cooling in the labor market have created conditions for a pivot (policy shift), analysts say.

The market is pricing in a rate cut in September as a given. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds futures market fully reflects a 100% probability that the Fed will cut rates by at least 0.25 percentage points at the September FOMC meeting. The chance of a 0.5 percentage point cut stands at 9.4%.

Anna Wong, an economist at Bloomberg Economics, said, "Most Fed officials will agree at the July meeting that the risks of a slowdown in full employment and a rise in inflation are nearly balanced," adding, "There is expected to be broad consensus that a rate cut will be appropriate soon."

Following last week's earnings reports from Alphabet, Google's parent company, and Tesla, more big tech earnings are scheduled this week. Microsoft (MS) and AMD will report on the 30th, Meta (Facebook's parent company) and Qualcomm on the 31st, and Apple, Amazon, and Intel will release earnings on the 1st of next month. If the big tech earnings released this week exceed expectations, the large tech stocks that fell last week could see a rebound.

Cross Asset Research head at Selex said, "If other companies in the Magnificent 7 report strong earnings, it could halt the downward movement we've experienced," adding, "It could be an interesting entry point for investors."

U.S. Treasury yields are declining. The 10-year U.S. Treasury yield, a global bond yield benchmark, is trading at 4.15%, down 4 basis points (1bp = 0.01 percentage points) from the previous trading day. The 2-year Treasury yield, sensitive to monetary policy, is moving at 4.37%, down 1 basis point from the previous day.

International oil prices are weak. West Texas Intermediate (WTI) crude oil fell $0.29 (0.38%) to $76.87 per barrel compared to the previous trading day, and Brent crude, the global oil price benchmark, dropped $0.33 (0.41%) to $80.8 per barrel. Concerns that a rocket attack by the Lebanese militant group Hezbollah on a soccer field in the Israeli-occupied Golan Heights could drive up oil prices were offset by forecasts of weakening demand in China.