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US stocks remain strong but face volatility

by LLB Finance Reporter
25th Jul 23 11:19 am

US stocks have been on a winning streak for a couple of months and could see additional gains if sentiment remains positive.

However, the main indexes have been trading sideways for the last couple of days as traders consider company earnings publications while caution takes hold as the Federal Reserve meeting comes closer.

The Federal Reserve is expected to decide on interest rates on Wednesday. While it went for a skip at its previous meeting, the Fed’s committee could opt for an increase in interest rates this time.

Denys Peleshok, Head of Asia at CPT Markets said,  “At the same time, the Federal Reserve could be at or near the end of its hike cycle which could help reduce traders’ concerns regarding rates, fueling more risk-taking and gains in the stock market.

“In this regard, the market could turn its attention to US economic data again over the next few weeks to determine the reality of the hiking cycle’s end. Data on inflation, the job market, as well as economic activity indicators, could be a source of volatility during the rest of this summer as traders readjust their expectations.

“Meanwhile, company earnings could continue to drive the stock market. After mixed earnings results from the banking sector, traders might monitor earnings from the technology sector.

“Tech giants Alphabet and Microsoft are expected to reveal their earnings today while Meta and Amazon will do so on Wednesday and Thursday respectively with the potential to create shocks on the market.

“The technology sector has been driven by bets on artificial intelligence and traders could react to any announcements from the four tech giants in this regard.”

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