Wall Street week ahead: Investors’ focus on Fed’s annual stress test results

On the Wall Street next week, investors’ major focus will be on the release of the results for the Federal Reserve’s annual stress tests of banks.

As the Federal Reserve contemplates new rules tied to Basel III Endgame, the bigger changes for banks are likely to come later, said analysts.

Next week, investors will also be watching for more data on the economic front, including key inflation data on Friday, as the second quarter comes to an end.

A preliminary report on Friday indicated that the overall US economy is continuing to grow, even though manufacturing is shrinking and its output fell to a five-month low.

Next week, earnings reports of following companies are due – Carnival, Walgreens Boots Alliance, Manchester United, Jefferies Financial, Micron Technology, General Mills, BlackBerry, Nike, Paychex, Simply Good Foods, McCormick,  and Constellation Brands.

On Friday, US stocks closed lower. The Dow Jones Industrial Average fell 219.28 points, or 0.65%, at 33,727.43. The S&P 500 lost 33.56 points, or 0.77%, at 4,348.33. The Nasdaq Composite dropped 138.09 points, or 1.01%, at 13,492.52.

The S&P 500 is up more than 13% since the year began.

Federal Reserve chairman Jerome Powell in his Congressional testimony had signaled more interest rate hikes ahead but vowed that the central bank would proceed with caution.

In the bond market on Friday, yields dropped as investors looked for safer places to park cash amid worries about the economy. The yield on the 10-year treasury fell to 3.73% from 3.79% late Thursday. 

On Friday, the US dollar rose to 143.81 Japanese yen from 143.07. The euro fell to $1.0891 from $1.0959.

Brent crude for August delivery fell 29 cents to $73.85 a barrel on Friday. US crude oil benchmark for August delivery fell 35 cents to $69.16 a barrel.

Gold for August delivery rose $5.90 to $1,929.60 an ounce on Friday. Silver for July delivery fell 12 cents to $22.35 an ounce.

Updated: 25 Jun 2023, 11:29 PM IST