The S&P 500 heads into next week roughly 2.3% below its June 2 record high, with the Federal Reserve's rate decision still unsettling investors. A jobs report due August 7 and a heavy earnings slate, including Caterpillar, Palantir and Merck, will decide the market's next move.
Wall Street enters next week still searching for direction, caught between an uncertain Federal Reserve and a jobs report that could reshape rate expectations. The S&P 500 was on track for a slim weekly gain as of Thursday after volatile daily swings, sitting roughly 2.3% below its June 2 record high.
Microsoft and Meta diverge on earnings
Investors are still digesting contrasting reactions to megacap tech earnings. Microsoft shares posted their biggest single-day percentage jump since 2008 after the company's upbeat forecast on cloud growth, while Meta's stock tumbled after it reported a plunge in cash flow.
Fed's hawkish hold clouds outlook
The Fed's "hawkish hold" on Wednesday left investors unclear about its plans, after three of its 12 policymakers dissented from the vote in favor of a hike. New Fed Chair Kevin Warsh, presiding over his second meeting, repeated his firm intent to bring inflation down to 2%, yet investors remained uncertain how he plans to get there.
Adding to the confusion, data on Thursday showed the core PCE Price Index, an inflation gauge the Fed tracks, rising 3.3% year on year in June. Art Hogan, chief market strategist at B. Riley Wealth, said the market has kind of been held hostage to the price of oil and the 10-year Treasury yield, both of which have moved higher: "We’ll see if we can get any relief on that front next week."
Payrolls report looms after Fed shake-up
The nonfarm payrolls report for July, due August 7, is expected to show an increase of 91,000 jobs and an unemployment rate of 4.3%, according to a Reuters poll. Fed funds futures were indicating a 64% chance of a rate increase at the Fed's next meeting in September, according to LSEG data.
Heavy earnings slate ahead
More than one-quarter of the S&P 500 is due to post results next week, including Caterpillar, Palantir and Merck. Elon Musk's SpaceX also reports its first quarterly results on Tuesday, after its shares stumbled following last month's post-IPO surge.
Overall, S&P 500 earnings are on pace to rise 27.7% on an adjusted basis from a year ago, according to LSEG IBES data, with the index up over 8% so far in 2026.
Source: Investing.com
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