U.S Stocks Are Roughly Flat as Tech Earnings and the Fed Rate Decision Loom

In early Tuesday trading, U.S. stocks are showing little change as investors remain cautious ahead of significant events, such as big tech company earnings reports after the market close and the upcoming Federal Reserve's interest rate decision on Wednesday.

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Here's how major indices are currently faring:

• The S&P 500 has risen by 3 points, remaining essentially unchanged at 4,557.
• The Dow Jones Industrial Average has lost 9 points, also staying flat at 35,402.
• The Nasdaq Composite has gained 61 points, showing a modest increase of 0.4%, reaching 14,119.

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Yesterday, the Dow Jones Industrial Average closed higher, marking an 11-session winning streak, the longest in over six years. This surge in the Dow is attributed to the belief among investors that the Federal Reserve's anticipated interest rate hikes for the rest of the year will not lead to a recession, given the cooling inflation.

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The market's performance over the next few days will largely depend on corporate earnings reports and the Federal Reserve's communications. Notable companies like 3M, Verizon Communications Inc., General Electric, and General Motors have already reported their results before the market opened today, while Microsoft, Visa, Alphabet, Coca-Cola, and Boeing are among those scheduled to release their earnings later. Additionally, investors are eagerly awaiting the Federal Reserve's monetary policy decision on Wednesday. Market expectations are that the central bank will implement another 25 basis point increase, bringing the policy interest rate to a range of 5.25% to 5.50%.

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However, uncertainty remains regarding whether this rate hike will be the last one in the current tightening cycle. Fed Chair Jerome Powell's comments during the press conference following the decision will play a crucial role in influencing bonds, equities, and forex markets around the event.

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There is a possibility of disappointment for some investors, as Fed officials may signal that the tightening cycle is not yet complete, hinting at the likelihood of another rate hike in the future. This could temper expectations of this week's rate increase being the last for the current tightening cycle in the U.S., as highlighted by Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.

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