Middle East troubles clouded sentiment as Washington cited rising US interest risks from Israeli Gaza actions and Lebanon border clashes.
The European Central Bank and Bank of Canada also hold policy meetings and, while no hikes are expected, investors will be sensitive to guidance on futures moves. The jump in yields has challenged equity valuations and dragged most of the major indices lower last week, while the VIX ‘fear index’ of US stock market volatility hit its highest since March.
Investors will be hoping earnings from US tech majors will provide some relief this week with Microsoft, Alphabet , Amazon and Meta Platforms all reporting. IBM and Intel are also on the docket. “As corporate and household income share the benefits of this nominal activity surge, the underlying resilience of the US private sector is being reinforced.”