Fed Faces 35% Odds of July Rate Hike as Oil Tops $100 and AI Earnings Loom
Updated
Updated · CNBC · Jul 24
Fed Faces 35% Odds of July Rate Hike as Oil Tops $100 and AI Earnings Loom
3 articles · Updated · CNBC · Jul 24
Summary
Fed funds futures now imply a 35% chance the Federal Reserve raises rates by 25 basis points next week, even as Wall Street’s base case still points to a move in September.
Oil above $100 a barrel and rising bond-market inflation expectations have sharpened concern that renewed Middle East hostilities could push the Fed toward a more hawkish stance.
Wednesday’s Fed decision lands in the middle of a crucial earnings stretch, with Meta, Microsoft, Amazon and Apple set to report after Alphabet’s spending plans and negative free cash flow rattled investors.
That pressure has hit megacaps harder than chipmakers: the Roundhill Magnificent Seven ETF is down more than 5% this week, while semiconductor ETFs have still risen on AI-spending hopes.
The market enters a seasonally weak August-September window with major indexes headed for monthly losses, though S&P 500 companies are still expected to post 38% year-over-year second-quarter earnings growth.