What will drive the markets this week?
U.S. stocks continued their decline on Friday as ongoing disruptions from a global technical outage, caused by a software glitch, added uncertainty to an already jittery market. The widespread tech outage, triggered by a cybersecurity firm Crowdstrike’s software malfunction, led to crashes in Microsoft’s Windows operating system, impacting operations across multiple industries, including airlines, banking, and healthcare.
European shares ended the week with losses, driven by a sell-off in technology stocks, disappointing earnings, and declines in commodity-linked stocks, all compounded by the global tech outage on Friday. The pan-European STOXX 600 index closed 0.8% lower, hitting a more than two-week low and recording a weekly decline of over 2%, the largest this year.
Asia-Pacific markets fell on Friday, mirroring Wall Street’s declines as investors moved out of tech stocks and profited from the recent equity rally. Japan’s Nikkei 225 closed 0.16% lower at 40,063.79, while the Topix dropped 0.27% to 2,860.83.
Investors will focus on earnings from several major companies this week, with Tesla (TSLA) expected to attract the most attention with its report on Tuesday.
Other prominent companies scheduled to release their financial updates include Alphabet (GOOG), Visa (V), Verizon Communications (VZ), IBM (IBM), and AT&T (T). Several pharmaceutical companies will also report their earnings, including AbbVie (ABBV), AstraZeneca (AZN), and Bristol Myers Squibb (BMY).
The June report on the personal consumption expenditures (PCE) index will be closely watched to see if inflation continues to decrease, providing Federal Reserve officials with crucial data on prices ahead of their late July meeting. Investors will also receive the first estimate of the second-quarter gross domestic product (GDP).
As Federal Reserve officials enter a blackout period before their next meeting, they are prohibited from making public comments this week. Meanwhile, political developments in Washington will be in the spotlight, as President Biden announced on Sunday that he would not seek reelection and endorsed Vice President Kamala Harris.