SpaceX Earnings Report May Spark Volatility Amidst Unclear Fed Policy

The Federal Reserve's next move is unclear after last week's meeting, where they left interest rates unchanged. Three out of 12 voters dissented from the decision, favoring a rate hike. Despite this, Morningstar Chief Economist Preston Caldwell thinks Fed Chair Kevin Warsh will support policy tightening at upcoming meetings.

SpaceX stock could be volatile this week due to its earnings report and expiring lockups. The company's AI business revenue is expected to grow, but it won't be profitable for a long time. Morningstar analyst Nic Owens also expects a wave of selling from pre-IPO investors with low-cost shares.

Microsoft (MSFT) stock rose 15% after the company reported good results. Morningstar Senior Analyst Dan Romanoff praised the strength in Azure growth and its artificial intelligent workloads, which is a clear long-term positive. However, he decreased his margin forecast due to higher capital expenditure.

Amazon's (AMZN) stock also rose 15% after strong second-quarter results. AWS growth accelerated sharply to 37%, the fastest growth in 18 quarters. Morningstar raised its fair value estimate on Amazon to $300 per share, as it looks undervalued after earnings.