The Fed's policy meeting will be the center of attention, however, more earnings followed by Nonfarm Payrolls will also play its part

Fed Policy Meeting

When policymakers wrap up their two-day policy meeting on Wednesday, investors will be looking for clues about whether the Fed still plans to drop interest rates at some point this year. Fed Chair Jerome Powell has stated that before lowering rates, the central bank wants further assurance that inflation is approaching its target of 2%.

The market's estimates for a first rate decrease in September remained mostly unchanged despite Friday's inflation data for March, which was mostly in line with expectations.

As statistics on inflation and the labour market keep surprising to the positive, expectations for interest rate reductions have decreased. At first, the financial markets anticipated that the first rate drop would occur in March. That target was rescheduled for June and then September.

More Big Earnings

Amazon and Apple are the final two "Magnificent Seven" megacaps to report, having pushed markets higher the previous year. Apple reports on Tuesday.

Since China's smartphone shipments dropped 19%, Apple is projected to report lower first-quarter profitability. The company's shares have already fallen more than 10% this year.

Focus will be on Amazon's cloud computing division, and investors will also be following the company's remarks on consumer spending.

The S&P 500 saw its largest weekly increase since November on Thursday thanks to strong results from Alphabet, the parent company of Microsoft and Google.

However, several of its competitors, including Tesla and Facebook's parent company Meta, have performed inconsistently.

Nonfarm Payrolls

The U.S. labour market's health will be examined once again on Friday when the monthly employment report is released. Economists predict that the economy gained 243,000 jobs in April, down from 303,000 in March. It is anticipated that the unemployment rate would stay at 3.8%.

ADP's data on hiring in the private sector, the report on JOLTS job postings, and further survey data will assist set expectations before Friday.

Investors will also be watching Tuesday's employment cost index data for clues on the ongoing cooling of labour market-related inflation pressures.

Eurozone

Tuesday's inflation and economic growth figures from the eurozone are expected to boost market betting on an early rate reduction by the European Central Bank in June.

Over the last year, inflation has rapidly decreased, and the European Central Bank (ECB) has signalled that it intends to lower interest rates in June. However, the longer-term picture is still bleak due to growing energy prices, persistently high service inflation, and ongoing geopolitical tensions that might potentially impede trade.

The bloc's GDP is only expected to have grown by 0.2% year over year in the first quarter, according to economists.

Consumer prices are predicted to have increased by 2.4% in April, mirroring the previous month due to rising energy costs, signalling a stalling of inflationary progress.

(Sources: investing.com, reuters.com)