The Week Ahead: Fed Rate Decision in Focus, Apple, Microsoft, Meta and Amazon Earnings Arrive

TradingKey - In the coming week, global financial markets will face the most intensive window of central bank decisions and economic data in July. The Federal Reserve, the Bank of England, and the Bank of Japan will successively announce their interest rate decisions. As international oil prices broke back above $100 and pushed up inflation expectations, market concerns over further policy tightening by major central banks have clearly intensified.

On the macroeconomic front, the US will release a flurry of data, including preliminary second-quarter GDP, the June Personal Consumption Expenditures (PCE) price index, durable goods orders, consumer confidence, and the second-quarter Employment Cost Index. China will release its official manufacturing PMI for July, while the Eurozone will also publish its preliminary second-quarter GDP and July inflation data, providing investors with the latest indicators to assess global economic growth and inflation trends.

On the corporate front, the US stock market's second-quarter earnings season will enter its most critical phase. Microsoft ( MSFT ), Meta Platforms ( META ), Apple ( AAPL) and Amazon ( AMZN ), the four mega-cap tech giants, will report their earnings within a two-day span. Boeing ( BA ), Visa ( V ), Coca-Cola ( KO ), Ford Motor ( F ), United Parcel Service ( UPS ), Starbucks ( SBUX ), ExxonMobil ( XOM) and Chevron ( CVX) and other industrial, consumer, and energy leaders will also report their earnings in succession.

Major Events Preview

Federal Reserve Announces July Interest Rate Decision as Market Reassesses Rate Hike Risks

On Wednesday (July 29), the Federal Reserve will conclude its two-day monetary policy meeting and announce its latest interest rate decision, followed by a press conference held by the Fed Chair.

As Brent crude oil broke back above $100 per barrel, U.S. inflation expectations and Treasury yields rose significantly, fueling rapid market expectations for a Federal Reserve rate hike. As of July 23, interest rate futures showed that the probability of the Fed raising rates by 25 basis points at this meeting had risen to approximately 31.5%, a sharp increase from 12.8% a week earlier. However, holding rates steady remains the market's baseline expectation.

Investors will focus closely on how the Federal Reserve assesses rising energy prices, labor market resilience, and the risk of inflation reheating. If the policy statement or press conference signals a rate hike in September, the U.S. dollar and Treasury yields could continue to strengthen, while gold and high-valuation tech stocks could face pressure. Conversely, if the Fed views the oil price shock as primarily transitory, the market's tightening expectations may cool.

Bank of England Announces Interest Rate Decision, Focusing on Split Vote and Inflation Forecasts

On Thursday (July 30), the Bank of England will announce its latest interest rate decision and release its monetary policy meeting minutes alongside its quarterly Monetary Policy Report.

The Bank of England currently maintains its benchmark interest rate at 3.75%, and the market widely expects the central bank to hold rates steady at this meeting. The UK's inflation rate stood at 2.6% in June, remaining above the 2% policy target, while rising international oil prices could further push up energy, transportation, and food prices in the country.

The market will closely watch whether the number of votes within the Monetary Policy Committee (MPC) in favor of a rate hike increases, and whether the Bank of England raises its future inflation forecasts. If more committee members shift to supporting a hike, the British pound and gilt yields could strengthen; if the central bank continues to emphasize slowing economic growth, market expectations for a near-term rate hike may be constrained.

Bank of Japan Announces Interest Rate Decision, with Yen Trends and Timing of Next Rate Hike in Focus

On Friday (July 31), the Bank of Japan will announce its latest interest rate decision and release its quarterly economic outlook report.

The Bank of Japan raised its policy rate to 1% in June, the highest level in 31 years. The market expects the central bank to keep rates unchanged at this meeting, but it may continue to warn of inflation risks arising from a weak yen, rising imported energy costs, and wage growth.

Investors will focus on whether the Bank of Japan upwardly revises its economic growth or inflation forecasts, as well as Governor Kazuo Ueda's remarks regarding the timing of the next rate hike. If the BOJ signals another rate hike later this year, the yen could receive support; however, if its policy stance remains cautious, the U.S.-Japan interest rate differential and high oil prices may continue to pressure the currency.

U.S. GDP and Core PCE to Be Released on Same Day, Putting Economic Growth and Inflation to a Dual Test

On Thursday (July 30), the U.S. will simultaneously release the advance estimate for second-quarter GDP, along with personal income, personal spending, and the PCE price index for June.

Second-quarter GDP will reflect the overall performance of the U.S. economy against the backdrop of high interest rates, shifting trade policies, and the expansion of corporate investments in AI. The market will focus closely on consumer spending, business equipment investment, and inventory changes to assess whether the U.S. economy continues to expand.

The core PCE price index is the Federal Reserve's preferred inflation gauge. Following the rise in oil prices that pushed inflation expectations back up, whether core PCE remains above the Fed's 2% target will directly impact monetary policy expectations for September. If GDP remains strong and core PCE exceeds expectations, the market may ramp up bets on interest rate hikes; conversely, if growth slows significantly while inflation cools, U.S. equities and gold could receive some support.

Tech Giants' Earnings Reach Climax as Returns on AI Capital Expenditure Face Scrutiny

After the market close on Wednesday (July 29), Microsoft and Meta will release their latest earnings reports.

For Microsoft, the market will focus intensely on the growth rate of its Azure cloud computing business, AI capacity supply, the commercialization of Microsoft 365 Copilot, and data center capital expenditures. As concerns grow that tech companies are ramping up AI spending too quickly, whether Microsoft can demonstrate investment returns on AI through Azure and enterprise software revenue will be key to its stock performance.

For Meta, investors will look at advertising revenue growth, user engagement, advertising efficiency driven by AI recommendation systems, and cost changes following the company's substantial increases in data center and AI investments. Meta previously projected second-quarter revenue of $58 billion to $61 billion, while the scale of its 2026 AI-related capital expenditure has already become a central point of market attention.

After the market close on Thursday (July 30), Apple and Amazon will announce their financial results.

The focus of Apple's earnings report will include iPhone sales, services growth, performance in the Chinese market, product gross margins, and the commercialization progress of Apple Intelligence. For Amazon, the market will watch AWS cloud computing growth, generative AI orders, retail business margins, and full-year capital expenditure guidance. Amazon previously forecast second-quarter sales of $194 billion to $199 billion and operating income of $20 billion to $24 billion.

Key Weekly Agenda

Monday (July 27)

Key terms: US durable goods orders

The US will release durable goods orders data for June. This data will reflect changes in demand for business equipment, machinery, aircraft, and other long-term assets, serving as an important indicator for tracking manufacturing investment and corporate capital expenditure.

The market will focus on the performance of core orders excluding transportation equipment to assess whether AI data center construction and industrial investment can continue to offset the impact of slowing demand in traditional manufacturing.

Tuesday (July 28)

Key terms: US consumer confidence, goods trade data, Boeing earnings, Visa earnings, Coca-Cola earnings

The US will release the Conference Board Consumer Confidence Index for July, along with preliminary figures for goods trade, wholesale inventories, and retail inventories for June.

The consumer confidence index will reflect the impact of high oil prices, interest rates, and labor market developments on US household expectations. On the corporate front, companies including Boeing, Coca-Cola, UPS, Visa, Ford Motor, and PayPal will report quarterly results.

Wednesday (July 29)

Key terms: Fed interest rate decision, Microsoft earnings, Meta earnings, Starbucks earnings

The Federal Reserve will announce its interest rate decision for July, and the market will focus on whether there is a rate hike at this meeting, as well as the policy statement's language regarding inflation, oil prices, and the policy path for September.

After the US market close, Microsoft, Meta, and Starbucks will release their quarterly results. Earnings from Microsoft and Meta will serve as an important window to test the return on investment of AI capital expenditure and could have a significant spillover effect on the broader mega-cap tech sector.

Thursday (July 30)

Key terms: Bank of England interest rate decision, US Q2 GDP, core PCE, Apple earnings, Amazon earnings

The Bank of England will announce its interest rate decision and release its meeting minutes and quarterly monetary policy report.

The US will release the preliminary estimate of second-quarter GDP, personal income and outlays for June, the PCE price index, and weekly initial jobless claims. The Eurozone will also release its preliminary second-quarter GDP, providing a reference for assessing the divergence in economic growth between Europe and the US.

After the US market close, Apple and Amazon will report quarterly earnings. The market will focus closely on iPhone sales, services business, AWS, generative AI investments, and capital expenditure guidance.

Friday (July 31)

Key terms: Bank of Japan interest rate decision, China PMI, Eurozone inflation, US Employment Cost Index, ExxonMobil earnings, Chevron earnings

The Bank of Japan will announce its interest rate decision and release its quarterly economic outlook report. The market will focus closely on the timing of the next rate hike and the trend of the yen.

China will release its official manufacturing and non-manufacturing PMIs for July. Investors will monitor changes in new manufacturing orders, production activity, and real estate-related demand.

The Eurozone will release its preliminary inflation data for July, while the US will release the second-quarter Employment Cost Index. The Employment Cost Index, which reflects wage and benefit growth, is a key indicator for assessing the persistence of US services inflation.

On the corporate front, ExxonMobil and Chevron will report second-quarter results, providing fresh clues to gauge the impact of high oil prices on energy companies' profits, cash flows, and capital expenditures.