ETH Hard Fork Ahead and the Fed Moves
- NexxtGen Markets
- 19 hours ago
- 5 min read
As the market braces for important developments, from the Ethereum hard fork to Federal Reserve moves, a series of earnings reports and geopolitical factors are expected to influence market sentiment this week.
Stocks Dip as Investor Caution Mounts
The U.S. stock market took a step back as investor sentiment shifted. The S&P 500 fell by -0.7%, the Dow Jones dropped by -0.95%, and the Nasdaq declined by -0.87%. This retreat follows a period of optimism, as comments from former President Trump dampened hopes for a resolution on trade issues. With the Federal Reserve’s decision looming, investors are on edge, awaiting clues about future interest rate moves and the impact of ongoing tariffs.
Tariff Impact on Earnings
Tariff-related issues continue to affect earnings projections. Ford is expecting a $1.5 billion hit to its earnings, while Mattel has pulled its full-year forecast. Other companies, like Tesla, have seen a decline in European sales, and Philips warned of potential losses amounting to $340 million due to tariff impacts. These challenges underscore the ongoing pressures facing companies with global supply chains and international sales.
AMD Surges After Strong Q1 Report
Despite broader market weakness, Advanced Micro Devices (AMD) posted a +1.72% rise after hours following an impressive Q1 earnings beat. Both earnings and revenue exceeded analysts’ expectations, driven by robust demand for AI and data center chips. This strong performance is reflective of AMD’s ability to maintain resilience in a competitive chip market, positioning it well for future growth in artificial intelligence and cloud computing.
Market Movers
Thredup Inc. (TDUP): +48% at $6.52
Hims & Hers Health (HIMS): +18% at $49.47
Oklo Inc. (OKLO): +13% at $28.66
Moderna Inc. (MRNA): -12% at $24.43
News Highlights: What to Expect This Week
Fed Day – All Eyes on the Fed's Rate Decision
The Federal Reserve is expected to keep interest rates steady when it meets today at 7:00 pm GMT. Investors will closely monitor Chair Jerome Powell’s statements for hints about future rate cuts and the impact of ongoing tariffs on the economy. With inflation under control and employment data stable, the Fed’s guidance will be crucial for determining how the U.S. central bank plans to navigate a complex landscape of trade uncertainty and mixed economic signals.
Assets to Watch
Stocks: The markets may continue to show volatility, particularly in tech stocks and companies that are vulnerable to trade tensions like Tesla.
Bonds: Bond yields could remain flat unless Powell’s speech leans dovish. Long-term bonds may see increased demand if the Fed signals a possible rate cut.
Gold: With uncertainty surrounding economic growth and inflation, gold may see increased demand as a safe-haven asset.
U.S. Dollar: The dollar may weaken if Powell signals a more dovish stance, which could lift commodities priced in dollars.
Commodities: Tariff-induced supply chain issues could continue to support commodity prices, though global demand concerns may limit price increases.
Bond Market Snapshot
Here’s where the yields stand ahead of the Fed meeting:
10-Year Treasury: 4.29%
2-Year Treasury: 3.78%
1-Year T-Bill: 4.00%
6-Month T-Bill: 4.21%
3-Month T-Bill: 4.32%
1-Month T-Bill: 4.30%
Ethereum Upgrade: The “Pectra” Hard Fork
The Ethereum network’s “Pectra” upgrade is scheduled for today at 10:05 UTC. During this upgrade, ETH trading will continue unless any network instability occurs, in which case ETH trading will pause temporarily. There will be a 1-hour pre-fork suspension and a 3-hour suspension for coin transfers.
This upgrade represents the largest code change since the 2022 Merge, enhancing staking, wallet usability, and blockchain efficiency. Key features include:
Easier and scalable ETH staking for validators.
Smart contract functionality added to wallets (EIP-7702).
Improved user experience, making Ethereum more accessible and user-friendly.
Potential Price Impact
If the upgrade proceeds smoothly, it could boost investor confidence and drive ETH price higher, especially if it leads to broader adoption and increased network usage. However, any bugs or delays could dampen short-term sentiment, so the market will be watching closely.
Will Disney Bring the Magic Today?
The Walt Disney Company will report its Q2 earnings today before the bell. Analysts expect earnings of $1.21 per share on $23.13 billion in revenue. Despite challenges such as DOJ scrutiny over its FuboTV deal and heightened competition in streaming and theme parks, Disney’s Direct-to-Consumer business remains strong. Analysts are looking for signs of renewed momentum and how Disney plans to navigate these challenges in the coming quarters.
Can Costco Deliver the Goods?
Costco will also report its fiscal Q3 earnings today. Analysts are projecting $4.25 per share, a 12.4% increase from the prior year. The stock has surged 36.5% over the past year, outperforming the S&P 500. With strong consumer loyalty and steady revenue growth, Costco’s value-driven strategy continues to fuel investor optimism. Analysts maintain a Moderate Buy rating, emphasising the company’s resilient business model.
Movers & Shakers
Pershing Square Holdings (PSH.L): +1.39%, £3655
Skechers USA Inc (SKX): +24.35%, $61.39
Ford Motor Co (F): -1.07%, $10.17
Palantir Technologies Inc. (PLTR): -0.41%, $124
Vistra Corp (VST): +3.43%, $145
Uber Technologies Inc. (UBER): +0.47%, $85.83
Coming Up Today
3:30 PM GMT – U.S. Crude Oil Inventories: Last week saw a 2.7 million barrel decline in stockpiles. Watch Brent and WTI for price action.
7:00 PM GMT – Fed Rate Decision: The Fed is likely to hold rates at 4.5%. Focus on Powell’s statement for potential signs of rate cuts in the coming months. Watch U.S. indices and USD pairs.
What to Watch
Uber’s Acquisition: Uber will acquire an 85% stake in Trendyol GO for $700 million, expanding its presence in the Turkish market.
Super Micro’s Missed Expectations: Super Micro posted disappointing earnings, citing economic uncertainty and tariff impacts. The stock slid 4% as it revised guidance downwards.
The Dollar: The dollar remains steady ahead of the Fed’s rate decision, with hopes for U.S.-China trade talks easing market pressure.
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