Fed Interest Rate Decision Sparks Market Expectations

The Federal Reserve's interest rate decision is at the forefront of investors' minds as they anticipate the bank's response to the current economic climate.

Market expectations suggest that the Fed will maintain its current stance, with a high likelihood of an interest rate hike in September and December.

A sufficiently hawkish tone from the Fed could provide support for the US dollar but may weigh on US stock markets and gold prices. Conversely, if the Fed fails to sound as hawkish as expected, it could lead to a decline in the USD's value and gains in equities and gold.

Besides the interest rate decision, US equity markets will also focus on the release of earnings reports from Meta Platforms and Microsoft, which may provide insight into AI spending plans and concerns about overleveraging and liquidity.