S&P 500 (SPY) Report – 07/25/23

Good morning traders! 

The S&P 500 ($SPY) is trading near yesterday’s close. Let’s get into it… 

U.S. stock futures were mostly unchanged on Tuesday as the market rally continues. Investors are anxiously awaiting the Federal Reserve’s policy decision on Wednesday, with a 98% probability of a quarter-point rate hike according to Fed fund futures data. They are also interested in Chair Jerome Powell’s outlook on the economy as it faces inflation challenges. While the market shows momentum, some experts believe that the fundamental backdrop remains negative, with economic and earnings risks skewed to the downside.

Microsoft and Alphabet are set to announce their Big Tech earnings, which will have a significant impact on the stock market rally. Artificial intelligence, a driving force behind the market’s gains in 2023, will be a key focus for investors. Microsoft’s earnings are especially anticipated, given its recent record high after announcing AI-powered Office apps. Alphabet’s earnings will also center around AI, but investors will closely watch its commentary on the digital advertising market. The outcomes of these earnings reports could influence the stock market’s direction in the second half of the year.

Currently, the S&P 500 is trading near its 15-month high and has risen by approximately 19% in 2023. Despite companies in the index expected to experience a 9% decline in second-quarter earnings, the stock market has been performing well. Initially, concerns were raised about the narrowness of the rally, driven primarily by a few big stocks and excitement over AI. However, the recent rally has seen a broader base, with the Dow climbing for an 11th consecutive day, its longest winning streak in over six years.

Tuesday Economic Events:
Redbook Sales 8:55am ET
CaseShiller HPI 9:00am ET
FHFA HPI 9:00am ET
Consumer Confidence 10:00am ET – High Volatility Expected
Richmond Fed Mfg Index 10:00am ET
Money Supply 1:00pm ET
API Crude Oil Data 4:30pm ET

Fed Speaker Scheduled:
No Fed Speakers Scheduled

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