By Lewis Krauskopf
4 min read
By Lewis Krauskopf
NEW YORK, July 31 (Reuters) – U.S. employment data and a batch of corporate results this coming week will keep equity investors on edge over the direction of the stock market, which has been buffeted by geopolitical tensions, uncertain interest-rate policy and sizable moves in heavyweight technology shares.
The S&P 500 was on track for a slim weekly gain as of Thursday, after some big daily swings, and was roughly 2.3% below the benchmark index’s June 2 record high.
Investors were digesting contrasting earnings reactions from Microsoft and Meta Platforms – two megacap companies whose massive AI spending has been at the heart of the bullish AI trade this year. Microsoft shares posted their biggest single-day percentage jump since 2008 after its upbeat forecast on cloud growth, while Meta’s tumbled after it reported a plunge in cash flow.
The Federal Reserve’s monetary policy meeting and resulting “hawkish hold” on Wednesday also left investors unclear about the implications for stocks amid what many said were mixed messages over the central bank’s plan for reining in inflation.
The monthly U.S. jobs report, due on August 7, will command Wall Street’s attention along with results from companies including drugmaker Eli Lilly and semiconductor designer Advanced Micro Devices.
The first quarterly report is also due on Tuesday for Elon Musk’s SpaceX, whose shares have stumbled after their post-initial public offering surge last month and which could have broader ramifications for investors’ risk appetite.
“It’s an overall market that is searching to regain its footing and kind of feeling around for where that is going to come from,” said Yung-Yu Ma, chief investment strategist at PNC Financial Services Group.
The S&P 500 is up over 8% in 2026. Investors have pointed to fundamental support for stocks from strong overall corporate profit growth, while a recent broadening of equity gains to lagging sectors could indicate more durability for the nearly 4-year-old bull market.
But concerns that some areas of the AI trade have become overheated have weighed on indexes, especially on high-flying shares of semiconductor companies that have retreated in July. A re-escalation in the U.S. war with Iran is also complicating the picture, with a resurgence in oil prices driving up Treasury yields on renewed inflation worries.
“The market has kind of been held hostage to the price of oil and the yield on the 10-year (Treasury), both of which have moved higher,” said Art Hogan, chief market strategist at B. Riley Wealth. “We’ll see if we can get any relief on that front next week.”
