By Martin Baccardax
U.S. stocks are braced for perhaps the most active two-day stretch in years starting Wednesday, with a key Federal Reserve interest-rate decision and a Senate vote to approve a new chair, a host of megacap tech earnings, and data on growth, jobs and inflation that will determine the early impact of the ongoing war with Iran.
Wall Street looks to have gathered itself from Tuesday's selloff, which was triggered in part by a report in The Wall Street Journal that outlined challenges at OpenAI, including missed revenue targets, that hammered the tech sector and pulled the Nasdaq 0.9% lower into the close of trading.
Stock futures suggest modestly firmer sentiment at the opening bell, but that could fade quickly as investors digest one of the busiest slates in recent memory over the coming days, including a host of S&P 500 earnings, a Senate Banking Committee vote on the confirmation of Fed Chair nominee Kevin Warsh, the central bank's April rate decision and updates from four of the so-called Magnificent Seven tech giants after the closing bell.
Global oil prices were also on the rise, with Brent crude delivery hitting the highest levels since late March following a Wall Street Journal report that suggested President Donald Trump will tighten the U.S. blockade of the Strait of Hormuz in order to compel Iran into an agreement to end the two month war.
"The near closure of the Strait continues to prolong a disruption that is steadily tightening global energy markets," said Ole Hansen, head of commodity strategy at Saxo Bank.
"With flows through one of the world's most important oil arteries still severely restricted, traders are focused on the next steps in peace talks and today's U.S. inventory report for further signs of how quickly stockpiles are being drawn down amid robust export demand," he added.
Brent crude futures for June delivery, which expire later this week, were 3.2% higher in early Wednesday trading at $114.75 a barrel, the highest since March 31, with WTI contracts for the same month jumping 3.6% to $103.49 a barrel.
Bond markets saw another move higher in benchmark Treasury yields, as well, with 10-year notes rising to 4.36% and two-year paper edging to 3.848% in early New York dealing. The elevated levels suggest renewed inflation pressures from the surge in crude prices, and the fact that investors aren't pricing in any change of Fed rate cut until early next year.
That will weigh heavily on the central bank's decision later on Wednesday, as well as what is expected to be the final press conference of current Chair Jerome Powell, who is expected to leave his post next month.
"Powell will likely explain why the Fed is unlikely to lower rates any time soon, and stress that inflation risks have increased, while unemployment risks have decreased," said Ed Yardeni, founder and president of Yardeni Reserach.
"The key question is whether persistently high, or even higher, oil prices will bleed into underlying inflation," he added. "The answer will largely depend on whether the current energy shock triggers a wage-price spiral as it did in 2022 when oil prices spiked after Russia invaded Ukraine."
Thus far, those issues haven't found their way into U.S. data readings on inflation or jobs growth, but that could all change on Thursday with updates on the PCE price index, first-quarter GDP, weekly employment figures, and the wages data for the first three months of the year.
Stock markets, meanwhile, will continue their focus on tech, with earnings from five of the Magnificent Seven giants, comprising around a quarter of the S&P 500's market value, expected over the next two days.
"A unifying theme across big tech earnings is whether companies are successfully monetizing revenue in line with their spending on AI, and this question will persist for the better part of the next decade," said Chris Brigati, chief investment officer at SWBC in San Antonio, Tx.
"While earnings beats are largely expected from Wednesday's big tech earnings, the market's focus is squarely on forward guidance both on growth trajectories and the pace of future investment," he added. "Each company faces its own dynamics, but delivering tangible results from elevated capex remains the critical test."
Write to Martin Baccardax at martin.baccardax@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 29, 2026 06:37 ET (10:37 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments