The crypto and stock markets are gearing up for a big week.
Investors will look forward to key Fed developments, including rate decisions and Powell’s conference, along with major earnings reports from tech giants and the upcoming Trump-Xi meeting.
All this could have a major impact on the markets, giving investors long-awaited clarity on liquidity, earnings and global trade that will determine how money moves for the rest of the year.
Fed Rate Decision – Wednesday
Markets widely expect the Fed to cut rates for the second time this year at its next meeting. According to the CME FedWatch toolthe probability of an interest rate cut by 25 basis points is currently 97.3%.
With the government shutdown depriving access to the latest economic data, investors will be keeping a close eye on how policymakers balance inflation with a cooling labor market. Analysts Note that the Fed must clearly explain how it makes decisions based on limited data, relying on its own studies to decide policy issues.
Jerome Powell press conference – Wednesday
Markets will also be closely watching Powell’s tone at his upcoming press conference as it could impact expectations for further rate cuts this year. If he points to easing inflation or increasing signs of a weaker labor market, it could boost the Fed’s confidence in continued rate cuts. Ultimately, that could see money flow back into stocks and crypto.
Powell has also hinted that quantitative tightening is nearing an end, which could impact investor sentiment. The end of the QT era could mark a major turning point for risky assets as it could effectively stop the drain of liquidity from the markets.
Microsoft, Alphabet, Meta Earnings – Wednesday
Big Tech gains are next, with Microsoft, Alphabet and Meta on Wednesday, followed by Apple and Amazon on Thursday. Strong results could give both the stock and crypto markets a strong boost.
President Trump meets with President Xi – Thursday
Finally, the long-awaited meeting between Trump and Xi on Thursday takes center stage.
U.S. Treasury Secretary Scott Bessent said Sunday that U.S. and Chinese officials have agreed on a “very substantial framework” for a trade deal, paving the way for talks between President Trump and President Xi this week.
The deal would avoid 100% U.S. tariffs on Chinese goods and delay planned Chinese export controls on rare earths. Moreover, Trump is also optimistic and expects to reach an agreement soon.
With the FOMC meeting and possible rate cuts, progress in trade negotiations and the government shutdown coming to an end, the whole thing seems to be full of bullish catalysts. However, there is also a risk that markets have already priced in much of the optimism, leaving little room for growth.
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