Wall Street Pauses as Investors Await Big Tech Results and Fed Decision

Wall Street’s record-breaking rally lost steam as investors shifted their focus toward a pivotal week featuring earnings from major U.S. tech companies and a highly anticipated Federal Reserve policy update.

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S&P 500 futures held steady after the benchmark index touched a new all-time high, buoyed by optimism surrounding fresh diplomatic progress between Washington and Beijing. Trade negotiators from both sides reportedly prepared a list of agreements for Presidents Donald Trump and Xi Jinping to highlight at an upcoming summit — a move that has helped sustain market confidence.

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Easing trade tensions have played a major role in powering the recent rally, with most U.S. corporations managing to sidestep the negative effects of tariffs. The S&P 500 is currently on pace to record its highest number of revenue beats in nearly four years.

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However, that optimism will be put to the test this week as investors await signals from the Fed regarding the direction of future rate cuts alongside earnings updates from tech heavyweights such as Meta Platforms Inc. and Microsoft Corp. The key question is whether artificial intelligence-driven earnings growth can keep up its remarkable pace.

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“While we are starting to see some froth in equity markets, we interpret this as late-cycle exuberance rather than an indication of a looming recession,” said Patrick Brenner, chief investment officer for multi-asset strategies at Schroder Investment Management. “Corporate fundamentals remain healthy, which supports our continued overweight position in equities,” he added.

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In Europe, the Stoxx 600 index edged lower from its record high, weighed down by declines in basic resources as oil, gold, and silver prices all softened. Among individual movers, Swiss pharmaceutical giant Novartis AG slipped after missing profit expectations, while BNP Paribas SA declined following a rise in loan-loss provisions tied to deteriorating debt performance in its trading division.

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By contrast, HSBC Holdings Plc climbed after upgrading its profit outlook, and both Capgemini SE and Iberdrola SA advanced following stronger-than-expected earnings results. German wind-turbine manufacturer Nordex SE was among the top gainers, soaring more than 10% after raising its forward guidance.

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Currency markets also saw notable moves. The Japanese yen strengthened against the U.S. dollar after Treasury Secretary Scott Bessent met with Japan’s newly appointed Finance Minister, Satsuki Katayama, to discuss recent volatility in exchange rates. Meanwhile, the Bloomberg Dollar Spot Index eased for a second consecutive session, and Treasury yields remained largely unchanged.

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China’s yuan reached its strongest level in nearly a year amid renewed optimism about a potential trade breakthrough with the U.S. The positive sentiment around trade progress also dampened demand for safe-haven assets, keeping gold prices below the $4,000-per-ounce threshold.

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Attention is now squarely on the upcoming wave of tech earnings, with five major companies Microsoft Corp., Alphabet Inc., Meta Platforms Inc., Amazon.com Inc., and Apple Inc. set to report on Wednesday and Thursday. Collectively, these firms represent roughly one-quarter of the S&P 500’s total market capitalization. On Monday, an index tracking the so-called “Magnificent Seven” mega-cap tech stocks jumped 2.6%, reflecting investor enthusiasm ahead of the results.

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“With the Fed expected to move forward with rate cuts, the continuation of this bull run will largely depend on this week’s lineup of high-profile tech earnings,” said Chris Larkin, managing director of trading and investing at E*Trade from Morgan Stanley.

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Meanwhile, copper a key barometer for global economic activity advanced and was trading within $60 of its all-time high set last year. The industrial metal’s rally reflected growing investor optimism about easing trade frictions between the world’s two largest economies.

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As the week unfolds, investors are bracing for a defining moment: whether the twin forces of a dovish Fed and resilient tech earnings can keep the record-setting market momentum alive or if the rally’s remarkable run is due for a pause.

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