Monday, July 25, 2022

US Market Wrap 07/25/2022

- Traders braced for earnings from several technology bellwethers as a hawkish Federal Reserve, scorching inflation, and a looming economic recession loomed.

- Following last week's rally in the S&P 500, trader anxiety was evident, with the index closing slightly higher after oscillating between gains and losses throughout the session. Following a two-day drop of nearly 30 basis points, ten-year US yields climbed back above 2.8%, following a cohort of tech shares weighing on the market ahead of results from the likes of Apple and Google's parent Alphabet.

- After raising rates by the most since 1994, Fed officials are expected to approve another 75-basis-point increase on Wednesday, signalling their intent to continue raising rates. The economy is already feeling the effects of repeated rate hikes, with the housing market cooling, unemployment claims rising, and tech firms cutting back on hiring.

- Growth in the tech world has sputtered, with investors expecting mostly bad news from megacaps. The revenue of Amazon is growing at the slowest rate in decades. Chipmakers are lurching from a period of expansion to a period of potential glut. Companies in the gig economy, such as Uber Technologies and Doordash, may suffer as a result of consumer budget cuts, and the decline in online advertising is expected to have an impact on the results of Facebook owner Meta Platforms.

Written July 25, 2022 by Charbel Constantine

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