S&P 500 & Nasdaq 100 Cautiously Anticipate Tech Earnings

SPX, NDX FUNDAMENTAL BACKDROP

The S&P 500 and Nasdaq 100 index have been rather muted building up to this weeks tech earnings extravaganza. Equity futures are looking to open in the red during early European trade due to market apprehension as global recessionary fears gain traction. In 2023 thus far, tech stocks and the wider SPX index ignored an aggressive monetary policy environment by the Federal Reserve but now with hawkish Fed speak seen last week, investors are unsure as to the Fed’s outlook moving forward. Money markets are currently pricing in a 25bps rate hike next week with an almost 90% probability – generally a negative for stock valuations as the value of future earnings looks less appealing.

FEDERAL RESERVE INTEREST RATE PROBABILITIES

This week is as much about earnings as it is about US economic data and its impact on the Fed’s trajectory for 2023. The DailyFX economic calendar below outlines the high impact data that could shape the markets perception for future rate hikes. While many are anticipating a slowing US economy, anything marginally resilient or pointing to elevated inflationary pressures may open the door for additional interest rate hikes.

SPX DAILY CHART