Stock Market Reaches New Highs as Fed Signals Rate Hold; Tech Earnings Loom Large
The S&P 500 and Nasdaq Composite hit record highs on recent trading, though gains remain limited by ongoing Middle East tensions and higher oil prices. Traders expect the Fed to hold rates steady, with the probability of a 2026 rate hike at just 8%, while major tech companies prepare to report earnings.
Market Records Despite Geopolitical Risks
The S&P 500 and the Nasdaq Composite rose to new record highs, but gains were limited as stalled Iran peace talks and a fresh escalation in the Strait of Hormuz pushed oil prices higher. The broad market index added 0.12% and closed at a record level of 7,173.91. The Nasdaq Composite gained 0.20% and notched a closing record of 24,887.10.
Fed Rate Expectations
Traders are currently pricing in a 100% chance that the Fed will leave rates unchanged at this week's meeting, with fed funds futures indicating policy is most likely to stay on hold for the rest of the year. The odds of a rate hike by the end of 2026 stood at 8%.
Tech Earnings Momentum
The "Magnificent Seven" companies face elevated expectations, needing to deliver solid revenue growth to validate heavy spending on artificial intelligence. Alphabet, Amazon, Meta Platforms and Microsoft are each up more than 10% this month, while the sentiment is that more good news is expected from results as the AI Revolution continues.