Jobs Report and AI Earnings Set to Dominate Market Focus
The upcoming week is set to be dominated by the July jobs report and AI earnings, which will keep investors on edge as they try to gauge the US economy's resilience.
Fed Chair Kevin Warsh's recent comments have created uncertainty about the Fed's policy path, with a September rate hike now only 65% priced in compared to being fully expected prior to the meeting. The July decision added to the doubts rather than offering clarity, leaving bond markets unimpressed and pushing the 30-year Treasury yield to its highest level since 2007.
The jobs report will be a key indicator of the economy's strength, with analysts forecasting a slight improvement in job growth from June's disappointing print. A soft jobs report would likely boost confidence in the labour market, fuelling rate hike bets for September, while a second straight month of a negative surprise would raise question marks about the strength of hiring.
Meanwhile, AI-related stocks have been under pressure due to concerns about overinvestment and financing, despite stellar earnings from most Wall Street firms in the second quarter. However, a rebound may be underway in chip stocks, particularly with semiconductor giants SK Hynix and Samsung listed on South Korea's stock market.