Wall Street focuses on Fed chair nomination and Big Tech earnings…Shanghai stocks enter an earnings-driven market [New York·Shanghai stock outlook]

FOMC set for the 28th; rate hold seen as the base case

Shanghai market watches SMIC and CATL results

U.S. stocks in New York this week (26–30) are expected to focus on the outcome of the Federal Reserve’s Federal Open Market Committee (FOMC) meeting on the 28th (local time), whether a nomination will be made for the next Fed chair, and Big Tech earnings.

Fed funds futures put the probability of the policy rate being held steady at 97% at this FOMC meeting. What the market is even more focused on is the next Fed chair. With BlackRock’s Rick Rieder, chief investment officer for global fixed income, former Fed governor Kevin Warsh, and Fed Governor Christopher Waller remaining as the final three candidates, prediction markets saw Rieder rise to No. 1 in nomination odds for the first time late last week.

This week, fourth-quarter results for last year from Microsoft (MS), Tesla, Meta and Apple will be released in succession. MS, Tesla and Meta report on the 28th, and Apple on the 29th. The key question is whether Big Tech can continue to maintain high profitability despite capital spending on artificial intelligence (AI) infrastructure.

Shares of MS and Meta are down more than 16% and 17%, respectively, from their 52-week highs. Apple is also down 14%, and Tesla has fallen by more than about 10%.

For MS, Meta and Tesla, concerns that excessive AI capex could also hurt their core businesses are a main driver of the declines, while for Apple, fears it could fall behind in the AI era have weighed on the stock.

Shanghai stocks are expected to enter a full-fledged “earnings-driven market” as major listed companies concentrate their full-year 2025 earnings guidance. With the Shanghai Composite having moved into a short-term consolidation after breaking above the 4,100 level—its highest in a decade—these companies’ report cards are likely to be a litmus test for the underlying strength of the services sector and capital markets. Global investors’ attention is particularly focused on results from Semiconductor Manufacturing International Corp. (SMIC), China’s leading chipmaker, and battery company Contemporary Amperex Technology Co. Ltd. (CATL).

New York=Correspondent Park Shin-young nyusos@hankyung.com