By Lewis Krauskopf
4 min read
By Lewis Krauskopf
NEW YORK, July 3 (Reuters) – Investors in the coming week will seek clues about the likelihood of impending interest-rate hikes and early signs of a pivotal earnings season as they gauge the strength of the U.S. stock market’s rally.
The second half of 2026 kicked off this week much the same as the first half ended, with rocky performances of heavyweight technology shares swaying major indexes. Minutes from last month’s eventful Federal Reserve meeting, as well as earnings from Delta Air Lines and PepsiCo, could provide new signposts for the market whose tech-fueled rally has wobbled in recent weeks.
Tech shares and especially semiconductors propelled the market’s gains in the past few months, with the benchmark S&P 500 rising 14.9% in the second quarter that ended Tuesday, its best quarter since 2020.
But more recently, that group has swung dramatically, including with steep declines to end this week. Other sectors have performed well over the past month such as healthcare, industrial and financial stocks, spurring investor hopes of a healthy rotation that leads market gains to broaden.
“That’s something I’ll be keeping my eye on over the next couple of weeks is to see whether or not that broadening continues,” said Joe Mazzola, head trading and derivatives strategist at Charles Schwab. “Or if you do start to see a protracted pullback in some of the technology winners, does that portend the market pulling back overall?”
INVESTORS SEEK RATE CLUES WITH FED MINUTES
The outlook for interest rates has switched from expectations at the start of this year for equity-friendly rate cuts, to projections of hikes in the coming months. Those rate-hike expectations were pared slightly on Thursday following a cooler-than-expected jobs report.
Hawkish bets had grown following last month’s Federal Reserve meeting, the first led by new chair Kevin Warsh. He emphasized the central bank would focus on delivering price stability, with inflation above the Fed’s 2% annual target. Minutes from that meeting will be released on Wednesday.
Warsh also warned that the central bank would no longer hold the market’s hand and was jettisoning forward guidance on what actions the Fed might take in the near term. That could make minutes of future Fed policy meetings more important.
“I think it’s going to be interesting to see how the discussion went around the table, how incrementally hawkish are they leaning,” said Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments.
