The New York Stock Exchange ended the previous week with a decline. While the main S&P 500 index fell by 0.65 percent, the technology-heavy Nasdaq even lost more than one percent. Investors reacted to the words of Fed Chairman Jerome Powell, who stated in a speech to US lawmakers that the increase in interest rates is not yet over.

The main index of the New York Stock Exchange extended its rally for five weeks, the longest continuous growth since November 2021. The Nasdaq had an eight-week rally, which last happened in March 2019, a year before the outbreak of the coronavirus pandemic.

However, it now seems that a challenging earnings season awaits the New York Stock Exchange (and possibly others) as companies will announce their performance in the second quarter.

According to analysts’ estimates, companies included in the S&P 500 index are expected to experience a year-on-year decline in profits of over five percent in the second quarter of this year. Profits in the first quarter, on the other hand, increased by one-tenth of a percent, while estimates suggested a five percent decline.

Experts anticipate that the impact of interest rate hikes, which the US central bank has implemented several times since the beginning of the year, must manifest itself. Furthermore, Fed Chairman Jerome Powell assured Congress last week that the rate hike cycle has not yet ended. These words also influenced the Friday market decline.

Companies traded on Wall Street and included in the S&P 500 index will begin reporting their second-quarter results in the second half of July. It is then that it may become clear whether the experts were right or wrong. Trading on the New York Stock Exchange during the summer will certainly not be dull.

Source: Valetkevitch, Culp – Reuters