Adding to the market’s volatility, the busy earnings season commences this week. Company results and their outlooks for the future could significantly impact stock prices.
Cues From The Last Session:
While apprehension ahead of the week’s key earnings and data was attributed to the weakness, the stock recovered thereafter to close higher for a second straight session. Market participants also blamed the intraday slide on an increase in the U.S. Treasury’s June quarter borrowing estimates.
The gains were led by consumer discretionary stocks, while communication services stocks dragged.
Insights From Analysts:
Ahead of the Fed meeting, Wharton Professor Jeremy Siegel, Senior Economist to WisdomTree, said in his weekly commentary, that the market is currently pricing in only slim chances of rate cuts this year. On Wednesday, the economist expects Powell to repeat the rhetoric that the central bank doesn’t have enough confidence to lower rates.
Siegel expects the press to probe as to whether the Fed was contemplating rate hikes. “Powell's answer to that may be illuminating,” he said. “It is quite possible with two more inflation prints before the June meeting, that the Fed can get enough information to signal imminent cuts. I'm not ruling out a rate cut at the June meeting.”
Fundstrat expressed confidence in the market recovery taking root. “Stocks survive ‘fragility test’ of April. Roadmap for May more constructive = recovery towards S&P 5,200,” said the firm in a post on X.
Upcoming Economic Data:
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