S&P 500 Ticks Higher as Fed and Big Tech Earnings Loom

The S&P 500 is currently influenced by two main factors: the Federal Reserve's next move and the earnings reports of Big Tech companies. According to the latest FOMC minutes, the Fed is not signaling a rate cut to calm markets, which means borrowing costs remain elevated. This is reflected in the 10-year Treasury yield hovering around 4.67%, a level that can be challenging for high-multiple tech stocks.

Big Tech's capex spending is another crucial aspect to consider. Alphabet, the parent company of Google, reported blockbuster growth in Q2 with revenue reaching $119.8 billion and cloud revenue jumping to $24.8 billion. However, their capex spending also rose to $44.9 billion, pushing free cash flow negative by about $5.9 billion.

The market's reaction to these developments will depend on the Fed's tone during the upcoming press conference on July 28-29 and the earnings reports of Big Tech companies. If megacaps show revenue leverage from AI and reinvestment, while Powell acknowledges disinflation without promising cuts, the market can grind higher.