Five Key Market Trends to Monitor This Coming Week – NASDAQ

Upcoming Economic Indicators and Tech Earnings to Shape Market Trend

As the momentum of the recent rally in U.S. stocks begins to wane, driven by concerns over sustained high interest rates, investors are gearing up for a critical week. Key earnings from major tech companies and pivotal inflation data are on the horizon. Here’s what to expect in the coming days.

Inflation Data on Watch
The market will focus on the U.S. personal consumption expenditures (PCE) price index, set to be released on Friday. This index, a preferred measure of inflation by the Federal Reserve, is anticipated to show elevated levels for March. Recent indicators suggest that inflation is proving stubborn, with strong labor market performance and geopolitical tensions in the Middle East, notably impacting oil prices. These factors, combined with remarks from Federal Reserve Chair Jerome Powell, have tempered expectations for near-term interest rate cuts.

Further Economic Insights
Additional economic reports this week include a preliminary GDP estimate for the first quarter, expected to show a slight deceleration from the previous period. Markets will also digest new data on home sales, jobless claims, consumer sentiment, and inflation expectations.

Tech Giants to Report Earnings
The spotlight will soon turn to the tech sector, with earnings reports due from four of the “Magnificent Seven” tech giants. Tesla (NASDAQ:TSLA) is scheduled to report on Tuesday post-market, followed by Facebook’s parent company Meta (NASDAQ:META) on Wednesday, with Microsoft (NASDAQ:MSFT) and Google’s parent Alphabet (NASDAQ:GOOGL) rounding out the week on Thursday. These companies are vital to the S&P 500’s performance due to their significant index weightings.

Oil Market Dynamics
Oil prices saw a modest increase on Friday, although the week concluded with a net decline. This followed Iran’s downplaying of an Israeli drone strike, which helped temper fears of escalated Middle Eastern conflict potentially disrupting oil supplies. Despite last week’s drop, oil prices remain supported by extended output cuts by OPEC+ members, including major producers Saudi Arabia and Russia.

Global PMI and Monetary Policy Focus
Investors will also keep a close eye on the Purchasing Managers’ Index (PMI) data from the Eurozone, the U.S., and the UK on Tuesday. This data is crucial for gauging inflation pressures, particularly in the services sector. In addition, the Bank of Japan (BOJ) will be in the spotlight at the end of the week as it releases its quarterly growth and inflation forecasts, with markets anticipating potential hints about future rate hikes.

Central Bank Outlooks
BOJ Governor Kazuo Ueda has hinted at a possible rate increase if inflation continues its upward trajectory, suggesting a move away from the long-standing near-zero interest rate policy.

This week promises to bring significant market-moving news, with implications for both global economic trends and individual investment strategies.

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