Take five: AI trade meets the Fed
SPY•Investors face policy decisions from the Federal Reserve, European Central Bank and Bank of Japan, alongside results from Alphabet, Amazon and Microsoft that could test the AI rally. Elections, China’s leadership gathering and Britain’s budget also add to the week’s market agenda.
1. Central bank decisions
The Federal Reserve, Bank of Canada and Reserve Bank of New Zealand meet Wednesday, the European Central Bank meets Thursday and the Bank of Japan meets Friday. Markets expect Canada and New Zealand to raise rates, while investors will watch for comments on the rate outlook, French borrowing costs and the BOJ’s inflation forecasts.
2. Big technology earnings
Alphabet, Microsoft and Amazon are due to report as investors assess whether their results support the AI rally and address concerns about data-centre spending. About one-third of S&P 500 companies are set to report, in a week seen as critical to whether third-quarter results meet high expectations for US profit growth.
3. Political and fiscal risks
Israel’s election could lead to lengthy coalition negotiations, while Brazil’s markets are set for a volatile restart after Lula’s re-election. In Britain, finance minister John Healey is due to present a budget; analysts polled by Reuters think he could allow fiscal headroom to narrow to around £15 billion without unsettling markets. China’s top leadership is also gathering for a four-day plenum as domestic demand remains weak.
