Amid easing Middle East tensions, US stocks are expected to open higher on Monday after experiencing substantial losses in the previous session. This optimistic outlook stems from reduced risk aversion, with investors looking ahead to an eventful week marked by significant events.
Major tech companies such as Meta Platforms, Amazon.com, Apple, Nvidia, Tesla, Meta Platforms, Alphabet, and Microsoft are set to release their quarterly earnings this week. These reports may provide further insight into the performance of US stocks.
The recent risk-on sentiment has been influenced by indications of reduced tensions in the Middle East. Iran’s foreign minister stated that the country was investigating an overnight attack and emphasized the absence of established connections to Israel.
Meanwhile, concerns regarding interest rate cuts from the US Federal Reserve persist as strong economic data suggest ongoing inflationary pressures. Market participants have adjusted their rate cut expectations, with money markets now anticipating approximately 38 basis points of reductions this year, significantly lower than the 150 bps projected at the beginning of the year.
The release of the Personal Consumption Expenditure (PCE) index for March, the Fed’s preferred inflation gauge, is expected to further clarify the monetary policy outlook. This data will be closely watched to assess inflationary trends.
Tesla shares have declined by 4.1% pre-market following price reductions in significant markets, including China, Germany, and the United States. On the other hand, Salesforce has risen by 3.3% after abandoning acquisition talks with Informatica, while Verizon Communications has gained 1.8% after reporting a lower-than-anticipated loss of wireless subscribers in the first quarter.
