(Bloomberg) — Markets settled into a holding pattern as the busiest week for US corporate earnings started moving into top gear, with the first of the “Magnificent Seven” big-tech giants — Google owner Alphabet Inc. — set to report on Tuesday.
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Investors are awaiting results from firms accounting for nearly 42% of the S&P 500’s market capitalization this week, including five of the seven tech megacaps which have powered this year’s rally. They’re also bracing for a raft of key economic data that will dictate Federal Reserve’s next interest-rate decision, as well as the US presidential election that is now just a week away.
The Stoxx Europe 600 index rose about 0.2%, while futures and the S&P 500 and Nasdaq 100 were little changed after Monday’s gains on Wall Street. Treasury yields slipped and a gauge of the dollar was flat. Oil steadied — after tumbling the most in more than two years on Monday — as the market focused on easing tensions in the Middle East.
“Near-term focus is shifting to megacap earnings that kick off today with Google,” said Charu Chanana, chief investment strategist at Saxo Markets. “There is still an expectation that AI spending will be maintained and that could continue to be a significant driver of broader equity momentum.”
Markets are positioning for the prospect of Donald Trump returning to the White House, with most major polls showing him locked in a tight race with Vice President Kamala Harris. Crypto companies surged, and Bitcoin rose past $71,000 for the first time since June, as the former president is seen as supportive of the digital tokens.
A victory for Trump would be more beneficial for stocks and Bitcoin relative to his Democratic opponent, while a Harris presidency would bring slightly more relief in housing costs, according to a Bloomberg Markets Live Pulse survey. Some 38% of respondents see equities accelerating a year from now under the Republican candidate, versus 13% under the Democrat.
Trump’s chances of a victory are increasing and “that’s seen as good for US stocks in the short run,” said Phillip Wool, head of portfolio management at Rayliant Global Advisors. “Deficits will increase, inflation will come back, and it could slow Fed rate cuts. All of this would put upward pressure on the dollar,” he said.
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