The new trading week is clearly shaped by the Federal Reserve’s interest rate decision on Wednesday. However, expectations for major surprises are low, as the FED has already delivered rate cuts and recently emphasized a more cautious, wait-and-see approach. As a result, market reactions are likely to be driven less by the decision itself and more by the tone of Jerome Powell’s press conference.
For markets, the key question remains whether the FED maintains its data-dependent stance or hints at an extended pause in policy adjustments. With neither inflation nor labor market data signaling urgent pressure, the probability of muted reactions remains elevated.
On Friday, US Producer Price Index (PPI) data will be released, but its relevance is currently limited. Without a clear surprise, it is unlikely to generate lasting momentum in bond markets or the US dollar.
Instead, attention is shifting toward the ongoing earnings season. Results from major players such as Apple, SAP, and other global corporates will take center stage. In an environment of elevated valuations, markets have become increasingly sensitive to margins, forward guidance, and demand outlooks.
Especially within the tech sector, strong earnings alone are no longer sufficient. What matters is whether guidance can justify expectations. For indices like the S&P 500 and the DAX, corporate messaging rather than macro data is likely to be the primary short-term driver.
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