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The crypto and stock markets are gearing up for a big week ahead.
Investors will be watching for key developments from the Fed, including interest rate decisions and Powell’s conference, along with major earnings reports from tech giants and the upcoming Trump–Xi meeting.
All of this could have a big impact on markets, giving investors long-awaited clarity on liquidity, earnings, and global trade that will shape how money moves for the rest of the year.
Markets widely expect the Fed to cut interest rates for the second time this year in its next meeting. According to the CME FedWatch Tool, the odds of a 25-basis-point rate cut currently stand at 97.3%.
With the government shutdown cutting off access to most recent economic data, investors will be closely watching how policymakers balance inflation with a cooling job market. Analysts note the Fed must clearly explain how it is making decisions with limited data, relying on its own surveys to decide on the policy matters.
Markets will also watch Powell’s tone closely in his upcoming press conference, as it could shape expectations for further rate cuts this year. If he points to easing inflation or growing signs of a weaker job market, it could reinforce the Fed’s confidence in continuing rate cuts. Ultimately, that could send money flowing back into stocks and crypto.
Powell has also hinted that quantitative tightening is nearing its end, which could influence investor sentiment. The end of QT could mark a major turning point for risk assets, as it could effectively stop draining liquidity from the markets.
Big Tech earnings are up next, with Microsoft, Alphabet, and Meta reporting on Wednesday, followed by Apple and Amazon on Thursday. Strong results could give both the stock and crypto markets a solid boost.
Finally, the highly anticipated Trump–Xi meeting on Thursday takes center stage.
U.S Treasury Secretary Scott Bessent said Sunday that the U.S. and Chinese officials have agreed on a “very substantial framework” for a trade deal, setting the stage for talks between President Trump and President Xi this week.
The deal would prevent 100% U.S. tariffs on Chinese goods and delay China’s planned rare-earth export controls. Moreover, Trump is also optimistic and expects to reach an agreement soon.
With the FOMC meeting and possible rate cuts, progress on trade talks, and the government shutdown coming to an end, the setup looks stacked with bullish catalysts. However, there is also a risk that markets may have already priced in much of the optimism, which could leave little room for growth.
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