Global markets are awaiting the earnings reports from tech giants and the Fed’s decisions

A major development in the financial markets: Despite the ongoing uncertainty surrounding the situation in Iran, investors are preparing to face a significant catalyst this week. In particular, the interest rate decision to be made by Federal Reserve (Fed) Chair Jerome Powell as his term nears its end, and the earnings figures from the major tech companies known as the "Magnificent Seven," are at the center of market attention. The most notable development of the week is that five major tech giants will be releasing their first-quarter earnings figures.

Microsoft, Alphabet, Amazon, and Meta will share their financial results on Wednesday; Apple will do so on Thursday. Following the release of Tesla’s data, attention will shift to Nvidia’s report later in the week. There is also heavy data flow in the financial services and energy sectors.

Economic Details

On Monday and Tuesday, balance sheet figures from communication giants like Verizon and T-Mobile, as well as payment systems such as Visa and Mastercard, will be released. Earnings from energy companies like Exxon Mobil, Chevron, and BP, meanwhile, offer key insights into the impact of the war in Iran on energy markets. On the economic data front, markets are focused on the Fed’s interest rate decision set to be announced on Wednesday.

Investors are pricing in a 99.5% probability that the Federal Open Market Committee (FOMC) will keep interest rates steady in the 3.50% to 3.75% range. In his March statement, Powell noted that upcoming data would be critical for assessing the economic impact of the war in Iran. The Personal Consumption Expenditures (PCE) price index, set to be released on Thursday, will reveal the latest state of inflation.

In particular, policymakers are closely examining the impact of the conflicts in the Middle East on March’s inflation figures. The March PCE data is expected to provide a clear picture of the trajectory of sticky inflation. This week serves as a test for tech giants, which lost approximately $850 billion in market value during the first quarter.

Analysts’ Views

According to Morgan Stanley data, these companies’ net income is projected to grow by 25% in 2026. Technology stocks, which have outperformed the rest of the S&P 500 index, have delivered a 13% return over the past month. This week’s earnings figures are seen as the first real test of investor appetite since the war in Iran began to impact the global economy.

Additionally, following Meta’s layoff decisions and Microsoft’s acquisition packages, there is growing curiosity about companies’ strategies regarding AI spending. Analysts note that the technology sector continues to maintain its “opportunity-rich” structure. The U.S. Department of Justice announced it has halted the criminal investigation into Jerome Powell regarding renovation costs at the Fed building.

This decision removed obstacles in the confirmation process for Kevin Warsh, who was nominated by Trump as the next Fed chair. With the suspension of the investigation, concerns about the central bank’s politicization have also eased somewhat.

Financial markets are closely monitoring this development. Investors are assessing the potential implications.