U.S. stocks drift higher as tech earnings, Fed rate decision loom

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Dow industrials manage 25-point gain in tentative bid to run win streak to 12

U.S. stocks were modestly higher on Tuesday as the Dow’s winning streak continued for now, while investors waited for big tech company earnings after the bell and the Federal Reserve’s interest rate decision on Wednesday.

Whether the Dow can make it an even dozen days of gains and extend its rally even further to fresh 15-month highs will likely depend on the next few days containing corporate earnings reports and Fed comments. Investors will be want to hear from Alphabet and Microsoft about their cloud businesses, the ongoing impact and use of artificial intelligence and their general outlooks for American and global markets, David Sekera, chief U.S. market strategist at Morningstar, said in a phone interview.

“Our view is the Fed is one and done,” Sekera said. Even with expectations that central banks will continue to “talk tough” on inflation, Sekera said Morningstar’s base case is that July’s 25-basis point hike is the last, while inflation continues to cool over the second half of the year. Rate cuts could occur as early as February, he said.

Read also: ‘No chance we’re having a soft landing’: Stock-market strategist David Rosenberg gives Powell’s Fed no credit — and no mercy

 

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