It's been a subdued start to a busy week studded with tech earnings and major data from both sides of the Atlantic.this week. Just five tech stocks have accounted for two-thirds of the S&P 500's gains this year, so a lot is riding on the outcome.
"We also believe a major narrative of tech earnings season will be the AI arms race and each Big Tech player updating investors on their own AI ambitions/monetization strategy as Redmond battles Google and other tech stalwarts for the AI trophy case," they write. The employment cost index and core personal consumption expenditure measure of inflation will help refine expectations for next week's Federal Reserve meeting. Futures price a quarter-point hike at 89%, suggesting the market would move more on a soft outcome in either figure.
Another risk bubbling away in the background is the U.S. debt ceiling with the House set to vote on theEven if passed, it is highly unlikely to get past the Democratic-controlled Senate, and analysts are starting to get antsy the government will run out of money earlier than expected because of weak tax payments.Spreads on U.S. five-year credit default swaps widened to 51 basis points , more than double the level they stood at the start of the year.