New York Stock Market Rises Awaiting Big Tech Earnings and Job Openings... Focus on FOMC

US Labor Department Announces June Job Openings
MS, AMD Earnings Released After Market Close
FOMC on June 30-31... Likely to Hint at Interest Rate Cut

The three major indices of the U.S. New York stock market are showing an upward trend in the early trading session on the 30th (local time). Investor buying momentum continues amid expectations for the earnings reports of big tech companies such as Microsoft (MS), which will be released after the market closes, and the Federal Open Market Committee (FOMC) meeting held over two days starting today. Attention is also focused on the June job openings report, which can gauge the recently slowing labor market conditions.

As of 9:31 a.m. at the New York Stock Exchange (NYSE) on this day, the Dow Jones Industrial Average is trading at 40,665.9, up 0.31% from the previous session. The S&P 500, which is centered on large-cap stocks, is up 0.31% at 5,480.75, and the tech-heavy Nasdaq index is trading 0.4% higher at 17,439.66.

By individual stocks, cybersecurity firm CrowdStrike is down 4.57%. The news that Delta Air Lines is preparing to sue CrowdStrike and MS following disruptions caused by a recent IT outage has acted as a negative factor. Shipping company Merck is down 4.92% despite strong second-quarter earnings, as its annual earnings outlook fell short of expectations. Global pharmaceutical company Pfizer is up 0.33% after reporting earnings that exceeded forecasts. MS, which is releasing earnings today, is down 0.13%, while AMD is up 0.59%.

This morning, the U.S. Department of Labor will release the June Job Openings and Labor Turnover Survey (JOLTs). The number of job openings in June is expected to have fallen to 8.02 million, below the previous month’s 8.14 million. With signs of cooling in the U.S. labor market, attention is on whether last month’s job openings will add to signals of employment slowdown.

After the market closes, MS, one of the Magnificent 7, will release its earnings. Earnings reports from AMD and Starbucks are also scheduled. On the 31st, Meta, the parent company of Facebook, and Qualcomm will report earnings, followed by Apple, Amazon, and Intel on the 1st of next month. If this week’s big tech earnings exceed expectations, it is expected to create a rebound trend in tech stocks that fell last week due to disappointment over earnings from Alphabet, Google’s parent company, and Tesla.

The FOMC meeting, held from today through tomorrow, is the biggest event of the week. With the benchmark interest rate likely to be held steady for the eighth consecutive time at around 5.25?5.5%, attention is focused on whether the Federal Reserve (Fed) will provide clues about the timing of rate cuts and the number of cuts this year. The market has already priced in a rate cut in September. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market is currently reflecting a 100% probability that the Fed will cut rates by at least 0.25 percentage points at the September FOMC. The possibility of a 0.5 percentage point cut stands at 8.5%.

Shima Shah, Chief Global Strategist at Principal Asset Management, analyzed, "Inflation is showing a downward trend, supporting the Fed’s rate cuts. A still-robust economic outlook and strong corporate earnings are working in harmony to strengthen risk assets and expand returns beyond tech stocks."

U.S. Treasury yields are steady. The 2-year Treasury yield, sensitive to monetary policy, rose 1 basis point (1 bp = 0.01 percentage points) to 4.4% from the previous day, while the 10-year Treasury yield, a global bond yield benchmark, remains around 4.17%, unchanged from the previous day.

International oil prices are declining. West Texas Intermediate (WTI) crude oil is down $0.73 (0.96%) from the previous trading day, trading at $75.08 per barrel, while Brent crude, the global oil price benchmark, is down $0.67 (0.85%) at $78.38 per barrel.