Fed Decision and a Series of Quarterly Big Tech Reports
Today we have two very important events ahead: the Fed decision and a series of quarterly reports from technology companies. This week we have a marathon of central bank meetings, and although no rate changes are expected, the bankers’ statements will be closely watched, especially because energy commodity prices affect inflation outlooks.
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Earlier this year markets priced in two rate cuts in the US in 2026, but those expectations have evaporated. In recent days oil prices have again crossed $100, and investors will want to hear whether this signals a possibility of rate hikes in the coming months, which could be difficult due to changes in the FOMC.
Recall that the current chair’s term is ending, and Trump’s presidential candidate should receive a green light from Congress after the DOJ drops the investigation against Powell. While Kevin Warch will have full political and institutional independence from Trump after his appointment, it is hard to imagine him raising rates “just in case.”
In this situation, pressure for higher rates could even hurt the dollar, as other central banks (including the ECB and the Bank of England) are expected to actually raise rates.
Big Tech Under the Microscope: Will Billion-Dollar AI Investments Pay Off?
While today the market will look at US rate prospects, it will take an even greater interest in tech company reports. The last four weeks have been a true frenzy in tech stock prices, especially those that thrive on data center construction investments.
Today the reports will highlight the “sponsors” of this change: companies that would not have seen the AI revolution we witness without them—Microsoft, Amazon, Meta, and Google (Alphabet). Each of these companies spends tens of billions of dollars annually on data infrastructure, financing these investments from “traditional” operations.
In a sense, without Windows or YouTube there would be no such rapid progress in the development and availability of language models. The markets know this, but in the wake of previous reports they reacted somewhat skeptically to further spending increases, fearing a lack of return and rising financing risks.
Thus today’s focus will be on how much these investments are already paying off and how companies view these prospects in the coming quarters. Yesterday’s session saw a slight pullback from peaks, but the market still enters this key day extremely overbought.
All this, however, has not yet moved the zloty significantly, which during the most volatile period impressed with stability. At 8:00 AM the euro costs 4.25 zloty, the dollar 3.63 zloty, the pound 4.90 zloty, and the franc 4.60 zloty.
