There’s a Fed meeting this week, and while they’re always closely watched, this one is of particular interest to investors keen to see how the central bank says the economy is weathering the U.S.-Iran conflict. More clues, meanwhile, will come in the form of earnings reports, with Big Tech taking the spotlight. The Federal Open Market Committee is slated to deliberate privately, then announce its interest-rate decision before a press conference on Wednesday. Most expect the committee to keep the federal funds rate between 3.5% and 3.75%, where it has sat since January. Still, some are hopeful that cuts may be coming later this year. The federal funds rate influences the interest rates charged on credit cards, car loans, and mortgages. Lower rates bolster spending and encourage hiring, which has been sluggish enough to cause concern among some Fed officials, but lower rates can also exacerbate inflation, which the war hasn’t helped.
Meanwhile, here come the “Magnificent Seven” tech giants. Alphabet, Amazon, Meta and Microsoft are slated to report results Wednesday, followed by Apple on Thursday. These are some of the largest companies in the world, and their results and forecasts can move markets. Some analysts are bullish about the industry’s buildout of AI infrastructure, but there are questions about when companies will see a return on those investments. The tech industry has outperformed other sectors since the war began, and investors have embraced AI companies, looking past the threat of a protracted conflict. That has spread to the storage firms supporting the AI buildout, several of which also report this week.
What analysts are saying about U.S. equities
Citi: “It is no surprise that valuations and implicit growth expectations are high after the beta rally. We continue to argue that this puts more pressure on longer-term fundamental expectations to deliver, rather than a signal to sell. So much value derived from future growth means we continue to be in an environment where confidence in EPS trajectories is potentially more important than near-term operating results alone. Valuation dispersion work suggests this narrative applies to a large cohort of index names rather than concentrated in a few megacaps.”
Evercore ISI: “The range of oil prices today drives ‘fat tail’ outcomes for stocks in 2026. A WTI spike to new highs above $120/bbl. or a prolonged period beyond July 4 of above $90 WTI/$4 per gallon gas prices will likely drive a retest of the 3/30 lows at 6,315, while a larger pullback to decade-long support at 5,500 cannot be ruled out. WTI falling sustainably below the post-spike trough of $76.73 opens the potential for 1982-style gains to SPX 9,000 and beyond. Our base case remains oil prices moderate to the mid-$80’s WTI/below $4/gal. gas before July 4th—tolerable for stocks and the economy.”
JPMorgan: “One should use market weakness to buy into it, as military, political, and economic constraints all argued against a prolonged confrontation. We stay positive on stocks despite MXWO making a V-shaped rebound and advise continuing to use dips driven by adverse geopolitical headlines to add.
RBC Capital Markets: “The story that our models tell is that the S&P 500 can stay on a path headed to 7,750 over the course of the next year, supported by a recovery in investor sentiment from deeply bearish levels and solid earnings growth and economic backdrop that don’t incur too much damage (as a whole) from recent disruption to energy markets and the Middle East.”