Federal Reserve keeps rates steady amid tech earnings

The Federal Reserve's decision to keep interest rates unchanged comes as major tech companies prepare to announce earnings.

Federal Reserve Holds Rates Steady as Big Tech Prepares for Earnings Reports

The Federal Reserve announced on Wednesday that it will keep interest rates unchanged at its July meeting, maintaining a benchmark lending rate of 4.25% to 4.5%. Fed Chair Jerome Powell stated that there were two dissenting voters who preferred to lower rates. As interest rates remain stable, attention now turns to upcoming earnings reports from major tech firms like Meta and Microsoft. Analysts expect Meta to report higher revenues and a potential increase in expenses linked to its AI hiring strategy. Microsoft, projected to report significant revenue as well, will be watched closely for Azure sales growth and future guidance on fiscal forecasts.

The Fed's decision not to change rates reflects caution amidst ongoing inflationary pressures. Powell's acknowledgment of uncertainties around recent trade deals highlights the complexity of the economic situation. With significant tech earnings on the horizon, both Meta and Microsoft are likely to face increased scrutiny from investors eager to see how they navigate a challenging landscape marked by rising costs and heightened competition. This week could serve as a critical moment for both companies, potentially influencing market sentiments ahead of further Federal Reserve meetings.

Highlights

The market’s response to upcoming earnings will be a key indicator of investor sentiment going forward.