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A report in line with expectations would highlight the economy’s growing reliance on the AI sector to sustain continued expansion.
Credit: Mario Tama / Getty Images

Key Takeaways

• The U.S. economy likely grew at an annualized rate of 1.8% in the second quarter.
• That GDP growth, supported by data center construction, is below the 2.3% average since 2000.
• Some forecasters believe economic growth will slow down in the coming months, as high fuel prices weigh on household budgets.

U.S. economic growth likely decelerated in the second quarter, with most of the remaining expansion attributable to data center construction, forecasters say.

A report Thursday from the Bureau of Economic Analysis is likely to show the inflation-adjusted Gross Domestic Product grew at an annualized rate of 1.8% in the second quarter, down from 2.1% in the first quarter, according to a survey of economists from Dow Jones Newswires and The Wall Street Journal. Much of the growth is related to the tech industry’s colossal spending spree on AI technology and the massive data centers on which the software operates, economists said.

A report in line with expectations would highlight the economy’s increasing reliance on the AI sector for continued expansion, with the economy growing at a slower pace than the 2.3% average since 2000.

What This Means For The Economy

A GDP report matching expectations would show the economy remaining resilient in the face of the Iran war’s energy shock, but far from booming.

“Capital spending by hyperscalers – like Amazon, Google, Meta, Microsoft, and Oracle – is projected to be almost $700 billion in 2026, which is $300 billion higher in 2026 than in 2025. That alone would account for a full one percentage point of GDP growth,” Brian Wesbury, chief economist at First Trust, wrote in a commentary.

Some forecasters expect the report to show weakness in other parts of the economy unrelated to AI, as high fuel prices weigh on household budgets and curb consumer spending.

“We think GDP growth will continue to underwhelm in the second half of 2026, as high energy costs take more of a toll on households and non-tech capex remains sluggish,” Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, wrote in a commentary.

Within the report, the rate of consumer spending growth will provide a barometer for the health of the economy outside of AI spending by businesses. Some experts see the economy slowing down in the quarters ahead from its current modest rate of expansion.

“While the report should reinforce the economy’s resilience, we doubt growth will accelerate in the second half of the year given a softer labor market, weak real income growth and a saving rate that remains near historic lows,” economists at Wells Fargo Securities, led by Chief Economist Tom Porcelli, wrote in a commentary.

Credit: Federal Reserve Chairman Kevin Warsh testifies before the House Financial Services Committee on Capitol Hill on July 14, 2026 in Washington, DC.

Key Takeaways

• The Federal Reserve is expected to keep its key interest rate flat Wednesday, but a hike would not come as a complete surprise either.
• Fed officials are weighing whether to raise interest rates to push inflation down to the central bank’s goal of a 2% annual rate.
• Developments in the Iran war, and Fed Chair Kevin Warsh’s policy of not issuing “forward guidance,” have made the meeting’s outcome much less of a foregone conclusion than usual.

Will the Federal Reserve raise its benchmark interest rate at the conclusion of its two-day meeting Wednesday? Financial markets are much more in the dark about the answer to that question than they usually are on day one of a Fed meeting.

As of Monday, traders were pricing in a 31% chance the Federal Open Market Committee would raise the fed funds rate by a quarter-point, according to the CME Group’s FedWatch tool, which forecasts rate hikes based on fed funds futures trading data. Although most experts expect the Fed to keep rates flat, the central bank faces growing pressure to raise interest rates to bring inflation down to its 2% annual target.

What This Means For The Economy

A rate hike would signal the Fed’s determination to get inflation down to a 2% annual rate, at the risk of slowing down the economy by making borrowing more expensive.

The Iran war has taken several twists and turns during the pre-meeting “blackout period,” during which members of the Federal Open Market Committee aren’t allowed to make public remarks. That’s left Fed-watchers guessing about how FOMC members view recent developments in the Middle East, which once again threatened oil supplies and drove up fuel prices.

The Fed’s Dilemma

The Fed faces a decision whether to raise its benchmark interest rate, its main monetary policy tool, which would push up borrowing costs on many kinds of loans. Doing so could help push down inflation, which has exceeded the Fed’s 2% goal since 2021, but at the cost of potentially slowing down the economy and hindering the job market.

The Fed is tasked by Congress with keeping inflation low and employment high, so setting the federal funds rate is a balancing act. With inflation high and unemployment low, officials have been weighing whether to raise rates, with rate cuts a possibility only if there were a mass wave of layoffs.

Recently, inflation has been driven up by tariffs and the surge in gasoline prices due to the war in Iran. However, in June, inflation decelerated after gasoline prices fell during a truce between the U.S. and Iran that allowed oil supplies from the Middle East to resume, easing pressure on the Fed to hike rates. Since then, however, prices have gone back up as global oil supplies have come under threat from fighting in both the Iran war and the Russian invasion of Ukraine.

Fed officials have sent conflicting signals about whether they believe rate hikes may be in order. At the Fed’s meeting last month, officials decided to keep rates flat but raised the possibility of rate hikes later in the year. One possibility is that the FOMC will vote to keep rates flat, but several members will cast dissenting votes in favor of a rate hike.

Warsh has said he believes too much transparency can harm the Fed’s decision-making because policymakers may be reluctant to set aside their predictions if conditions change. Warsh has frequently used the phrase “good family fight” to describe his ideal Fed meeting, with the outcome not set in stone and instead openly debated. If Fed-watchers are right, that fight may be taking place right now.

“Chair Warsh has said he prefers ‘messier’ FOMC meetings, and this week’s meeting may provide an early look at what that means in practice,” Gus Faucher, chief economist at PNC, wrote in a commentary.

Shares of SpaceX touched new lows on Monday.
Credit: Samuel Boivin / NurPhoto via Getty Images

Key Takeaways

• SpaceX stock hit record lows on Monday but rebounded in recent trading.
• The stock has fallen below its IPO price, continuing its decline since the company’s mid-June listing.

Shares of SpaceX touched new lows on Monday. Things weren’t looking better earlier today—but that was before the bounce.

SpaceX (SPCX) stock, which fell below yesterday’s low point—the shares on Monday set record lows both intraday and at close—in morning trading as tech stocks, measured by the Nasdaq 100, retreated and the S&P 500 edged lower. The stock was recently up some 3% to about $117.

The stock for now looks on pace to slow the downward move on which it’s been set since its mid-June IPO, which met with much fanfare and quick gains before turning negative. Along the way, it has dropped below the price at which it first changed hands as a public company, as well as the one at which it sold shares to the public. 

Wall Street analysts still have a generally optimistic outlook on the stock, with the mean price target representing a more-than-doubling from recent prices. And there are signs of buying as the stock has fallen: Cathie Wood’s ARK funds, for example, bought thousands of shares yesterday, according to trade notifications.

But some ostensibly upbeat events, including the addition of the stock to several high-profile indexes, hasn’t revitalized the shares, and investors are now looking forward to the expiration next month of post-IPO lock-up agreements that would allow some investors to sell more shares.

News of the day for July 28, 2026

Stocks ended yesterday mixed as chip stocks pulled the Nasdaq lower while the Dow rose.
Credit: Angela Weiss / AFP / Getty Images

Stocks are pointing to a mixed open as investors assess a flurry of earnings reports from major companies; chip stocks are under pressure amid AI bubble fears; UPS, Boeing, Visa and Coca-Cola are among the major firms reporting earnings today; crude oil prices are falling again amid hopes that the U.S. and Iran will restart peace talks; and the Fed is set to kick of its two-day policy meeting. Here’s what you need to know today.

Futures Mixed as Chip Stocks Struggle

Stock futures are mixed this morning as shares of chipmakers lose ground and investors digest earnings reports from several big-name companies. Dow Jones Industrial Average futures were recently up 0.7%, while S&P 500 futures were little-changed and futures tied to the tech-heavy Nasdaq slid 0.8%. The Dow gained yesterday while the S&P was nearly flat and the Nasdaq fell slightly. WTI crude oil futures were down 1% at $82 per barrel, losing ground for the third straight session, amid hopes that the U.S. and Iran could start a new round of peace talks. Gold futures declined 1% to $4,030 an ounce, while bitcoin was trading at $63,400, down from an overnight high of around $65,000. The yield on the 10-year Treasury note, which affects interest rates on loans, ticked lower to 4.63%.

Chip Stocks Extend Slide Amid AI Bubble Fears

Shares of a number of chipmakers are falling this morning, extending a rough stretch for the AI trade driven by fears that some companies have become overvalued, as well as concerns about the sustainability of spending. Analysts have noted that solid earnings don’t appear to be enough to boost tech stocks anymore as investors have grown used to big revenue and profit growth numbers. Shares of Nvidia (NVDA), Broadcom (AVGO), Micron (MU), Marvell (MRVL), Intel (INTC), Sandisk (SNDK), SK Hynix (SKHY) and many others are declining premarket. The iShares Semiconductor ETF (SOXX) was down 4% ahead of the opening bell.

Coca-Cola, Boeing, UPS Headline Earnings Today

A number of major companies are reporting second-quarter results this morning, including Coca-Cola (KO), United Parcel Service (UPS) and Boeing (BA). UPS shares were up 1% after the shipping giant topped estimates and lifted its full-year sales and profit forecasts as it works through a turnaround plan that involved shedding thousands of jobs last year. Coca-Cola also topped estimates and lifted its full-year outlook amid a “dynamic consumer landscape,” sending its shares up more than 3%, above the record high set earlier this month. Boeing shares were up 1% after the airplane maker reported higher-than-expected revenue and a larger adjusted loss than analysts had estimated. After the closing bell this afternoon, reports are due from Visa (V) and hard drive maker Seagate Technologies (STX), which has seen its stock soar this year thanks to AI demand. The earnings calendar gets even busier in the coming days, with particular focus on results from tech giants Meta Platforms (META), Microsoft (MSFT), Amazon (AMZN) and Apple (AAPL).

Oil Prices Keep Falling Amid Hopes for US-Iran Talks

West Texas Intermediate futures, the U.S. crude oil benchmark, are falling for a third straight day to $82 a barrel after peaking above $92 late last week, the commodity’s highest price in over a month. Renewed strikes from the U.S. and Iran drove prices higher earlier this month, as a ceasefire fell apart amid conflicts over traffic through the Strait of Hormuz. The fighting was put on pause in recent days, and mediators have said progress is already being made. President Trump said Iran asked for a new round of peace talks because of how heavily the country had been struck. Iran has denied that claim, saying that there are no direct peace talks currently.

Fed to Start Two-Day Meeting on Interest Rates

The Federal Reserve’s policy committee is scheduled to begin meeting today, with a decision on interest rates and a press conference with Fed Chair Kevin Warsh coming tomorrow afternoon. The Fed isn’t expected to adjust its key rate at this meeting, but market participants are pricing in the likelihood that the central bank will raise rates at least once later in the year to contain inflation. Inflation has moved further above the Fed’s annual target of 2% in recent months as fuel prices have surged owing to the Iran war. Warsh, who took over the top spot at the Fed in May, has said repeatedly that taming inflation is the Fed’s top priority. He has also said that the Fed will provide less guidance about possible future rate policy than his predecessors did.

Credit: David Paul Morris / Bloomberg via Getty Images

Key Takeaways

• The Fed’s preferred inflation gauge likely showed inflation decelerating in June, similar to the Consumer Price Index report released earlier in the month.
• The drop in the inflation rate is expected to stem from gasoline prices falling that month, although prices have risen since.
• The report will come too late to influence the Fed’s decision Tuesday and Wednesday whether to raise interest rates to counteract high inflation.

The Federal Reserve’s favorite measure of inflation is likely to show consumer prices fell in June due to a temporary drop in gasoline prices that month, although the data will come too late to influence the Fed’s interest rate decision on Wednesday.

Economists expect a report from the Bureau of Economic Analysis on Thursday will show prices rose 3.7% over 12 months in June, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. That’s down from a 4.1% annual increase in May.

The “core” price index, which excludes volatile food and energy prices, is expected to edge down to a 3.3% annual increase, down from 3.4% in May. Economists closely watch the core index as a measure of persistent inflation trends, and the Fed uses it as the benchmark for whether inflation is running at its target of 2% annually.

The report is likely to show an encouraging drop in inflation due to a decrease in gasoline prices in June stemming from the temporary resumption of oil supplies from the Middle East during a pause in the Iran War. If the report matches expectations, it would show a trend similar to that of the Consumer Price Index.

However, Fed officials won’t be able to take PCE inflation into account on Tuesday and Wednesday when deciding whether to raise the central bank’s benchmark interest rate to counteract inflation.

As of Monday, financial markets were pricing in a 38% chance the Fed would raise its fed funds rate by a quarter point, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data. A hike would drive up borrowing costs throughout the economy in an effort to wrestle inflation down to the 2% target for the first time since 2021.

What This Means For The Economy

Cooling inflation would relieve pressure on household finances and the broader economy, albeit temporarily, since the Iran War once again threatens supply chains.

The June report also won’t show the effects of the latest energy price shock on consumer prices. Gasoline prices rose again in July after the U.S. and Iran resumed fighting, Iran threatened the flow of oil supplies through both the Strait of Hormuz and the Bab-al-Mandeb Strait, and Ukraine attacked Russian oil refineries, further disrupting global fuel supply chains.

”The re-escalation of the war with Iran and attacks on Russian oil refineries have pushed energy prices higher and revived fears that the already lengthy series of supply shocks could continue,” wrote David Mericle, chief U.S. economist at Goldman Sachs.

Forecasters at Morgan Stanley anticipated a mixed bag of price increases and decreases within core inflation, according to a commentary by economists led by Chief U.S. Economist Michael T. Gapen.

“We expect a modest acceleration in core goods inflation, driven by another strong increase in software prices, likely reflecting ongoing AI-related demand pressures,” Gapen wrote. “However, this strength should be more than offset by slower services inflation than in May, leading to a slowdown in overall core inflation. Key services categories expected to decelerate include shelter, food services and accommodations, and financial services.”

Tech heavyweights Microsoft, Meta, Apple and Amazon are among the companies set to report results this week
Credit: Angela Weiss / AFP / Getty Images

Key Takeaways

• Investors haven’t been rewarding tech companies’ stocks for strong results this earnings season, according to a report from Bank of America.
• Worries about an AI bubble and the sustainability of spending have weighed on stocks in the sector lately.
• Several Wall Street experts have said they expect sentiment to shift back in favor of the AI trade, given fundamental growth.

Tech companies are driving blowout results this earnings season. But investors aren’t rewarding their stocks the way they usually do.

Of the less than 30% of S&P 500 companies that have already reported earnings so far, nearly 90% have reported better-than-expected earnings, according to FactSet, with the tech sector among the strongest contributors. However, companies that beat profit and sales estimates recently have only outperformed the S&P 500 by an average of 1.2 percentage points the day after their results, a bit below the historical average of 1.4 points, analysts at Bank of America found. Tech stocks have lagged by about 2.6 points.

“Following several years of strong growth and upward revisions, good results are no longer enough to move the needle in tech so far this quarter,” the analysts wrote, amid growing unease around the sustainability of AI spending. This week, expected to be one of the busiest of this earnings season, could test whether that trend continues, or sentiment shifts back in the AI trade’s favor.

Why This Matters to Investors

Earnings this week from some of the biggest names in tech could underscore weakening sentiment around the AI trade, or help rekindle enthusiasm for the industry after a pullback in recent weeks.

This week, 169 companies of the S&P 500 are slated to report quarterly results, including Magnificent 7 members Microsoft (MSFT), Meta (META), Apple (AAPL) and Amazon (AMZN). That’s after investors sent Tesla (TSLA) shares tumbling after the EV maker revealed its investments in AI and R&D squeezed profits. Alphabet’s (GOOGL) stock also took a hit despite earnings that topped Street estimates, after the company warned it plans to boost spending on its AI buildout. Intel (INTC) saw its stock slide too, even after posting blowout results.

Still, several Wall Street firms including Morgan Stanley, Mizuho and Oppenheimer, have said they see sentiment eventually shifting back in favor of tech stocks, given fundamental growth trends. “Looking at current valuations and the current earnings season, more factors appear to be getting better than getting worse,” Oppenheimer analysts wrote in a note Monday, telling clients tech remains one of their favorite sectors. An anticipated resolution to tensions in the Middle East and subsequently improving economic backdrop could also stand to lift the stocks, Oppenheimer said.

Morgan Stanley analysts told clients Monday they would view recent weakness as an opportunity to buy the dip in AI stocks, particularly the hyperscalers like Meta, Alphabet, Microsoft and Amazon. “Bottom line: we’re bullish on the ‘Intelligence Superhighway,’” they wrote.

Meta Platforms shares are down 10% since the start of the year.
Credit: David Paul Morris / Bloomberg / Getty Images

Key Takeaways

• Meta is set to report earnings Wednesday afternoon, with options pricing suggesting traders see its stock swinging up 7% by the end of the week.
• Analysts expect Meta to report growing revenues and a smaller increase in profits as it makes big investments in AI infrastructure.

Meta Platforms is slated to post its quarterly earnings after markets close today, with traders pricing in a sizable move from the social media giant’s stock.

Based on recent options pricing, traders expect Meta (META) shares could swing up to 7% in either direction by the end of the week. A move of that size from Tuesday’s close could see shares climb back above $636, where they were earlier this month. The low end of that range could drag them below $551.

Meta shares are down 10% since the start of the year, as solid quarterly results have been outweighed by concerns over spending on its AI buildout. The Facebook and Instagram parent’s shares got a boost earlier this month by reports that Meta is considering selling excess compute capacity to other AI companies, an idea Meta executives could face questions about during Wednesday’s earnings call.

Why This Matters to Investors

Earnings from several Magnificent 7 members this week could test investor confidence in the AI trade after Tesla and Alphabet shares fell following their reports last week.

Deutsche Bank analysts, who hold a “buy” rating and $800 target for the shares, wrote that after Alphabet hiked its capital expenditures forecast last week, investors are worried Meta might do the same.

Meta is projected to report second-quarter revenue of $60.23 billion, up about 27% year-over-year, per Visible Alpha estimates. Earnings per share are seen coming in at $7.19, up just 5 cents from the same time a year ago as the company continues to spend big on AI infrastructure.

Analysts are largely bullish on Meta, with 16 of the 17 analysts with current ratings tracked by Visible Alpha calling the stock a “buy” compared to one neutral rating. Their mean target of $835 suggests they see the stock making a full recovery to fresh records in the next 12 months.

This article has been updated since it was first published to reflect more recent prices.

Shares Are Down Nearly 50% from Their Mid-June High

SpaceX shares have come back to Earth since their hot IPO last month.
Credit: Photo by Miguel J. Rodriguez Carrillo / AFP via Getty Images

Key Takeaways

• Shares of SpaceX fell to closing and intraday lows Monday, starting the week on a downbeat note.
• Investors are waiting for the company’s first quarterly financial results since its mid-June IPO. Those results are due next week.

SpaceX started the week in retreat, touching record lows.

Shares of SpaceX (SPCX) finished down 1.4% at $113.50, on a broadly quiet day for markets. Their finish marked the shares’ lowest close yet, and Monday’s intraday low below $109 was itself a record. That left the company’s market capitalization around $1.5 trillion, just a bit above Elon Musk’s other big public company, Tesla (TSLA). Tesla’s stock, which plunged late last week after the company delivered disappointing earnings, fell 1.2% today as the Magnificent 7 group of big tech stocks, as measured by the Roundhill Magnificent 7 ETF (MAGS), ticked lower.

The Musk-led rocket, connectivity and artificial intelligence company’s latest slip extended a dramatic downward run for a company that sold shares to the public in mid-June, saw its stock quickly jump above $225, and then watched as the shares fell to below their IPO price over the course of about a month. Investors now have the company’s first quarterly earnings report—and the likelihood of extensive commentary from Musk—to look forward to next week, but for now their enthusiasm seems to have cooled.

Wall Street analysts remain generally bullish, with Visible Alpha calculating an average price target over $293 that is more than double today’s close. Morgan Stanley, which calculates the shares’ value at $300, in a Monday note said that “at less than $120/share, we believe investors are paying a  reasonable multiple for the core Space + Connectivity business while receiving limited-to no value for the company’s AI opportunity, despite multiple monetization paths” to 2028 AI revenues around $100 billion.

“We see the current valuation as an attractive entry point,” they wrote.

Even with its recent pullback, Seagate’s stock is one of the S&P 500’s top performers for 2026
Credit: Chris Jung / NurPhoto / Getty Images

Key Takeaways

• Seagate is due to report earnings after the closing bell Tuesday, with options pricing suggesting traders see its stock swinging as much as 12% in either direction by the end of the week.
• The stock has slipped off its highs in recent weeks amid a broader pullback in the AI trade.

Seagate is slated to report earnings after the closing bell Tuesday, and traders are anticipating a big move from the hard drive maker’s stock following the results.

Based on recent options pricing, traders expect Seagate (STX) shares could swing as much as 12% in either direction by the end of the week. A move of that size from the stock’s level midday trading Monday could see the shares rebound above $900, where they were earlier this month, or drag them down to around $720.

The shares have tripled in value since the start of the year, though they’ve slipped roughly 30% from their highs last month amid a broader pullback in the AI trade in recent weeks.

Why This Matters to Investors

Expectations are running high for Seagate’s results after price hikes in recent months and a torrid rally in its stock.

Analysts at Morgan Stanley said in a note to clients Monday that they expect Seagate, along with rival hard drive maker Western Digital (WDC), to top Street estimates and raise their outlooks thanks to strong demand for their hardware and higher prices. Western Digital’s results are scheduled to be released on Aug. 5.

Seagate is seen reporting adjusted earnings per share of $5.12 on an over 40% year-over-year rise in revenue to $3.5 billion for its fiscal fourth quarter, according to estimates compiled by Visible Alpha.

Analysts are generally bullish on Seagate. Of the six analysts with current ratings surveyed by Visible Alpha, five recommend buying the stock, compared to one neutral rating. Their average price target around $992 would suggest more than 20% upside from the stock’s recent level.

Microsoft shares are down nearly 20% since the start of the year.
Credit: David Paul Morris / Bloomberg / Getty Images

Key Takeaways

• Microsoft is set to report earnings Wednesday afternoon, with recent options pricing suggesting traders see its stock swinging up to 6% by the end of the week.
• Its stock has been pressured lately amid worries about AI spending.

Microsoft is scheduled to report earnings after the closing bell today, with traders anticipating a big move from the software giant’s stock.

Based on recent options pricing, traders expect Microsoft (MSFT) shares could swing up to 6% in either direction by the end of the week. A move of that size from Tuesday’s close could see the stock rally as high as $418, its highest point in over a month. The low end of that range could see the shares slip as low as $368.

Microsoft shares have lost nearly 20% of their value since the start of the year as worries about AI disruption have weighed on the software sector broadly. Concerns about Microsoft’s spending on its AI buildout have also pressured its stock.

Why This Matters to Investors

Earnings from several big names in the tech sector this week could test how investors are feeling about the AI trade following results from Alphabet and Tesla last week that sent the stocks lower.

Deutsche Bank analysts said in a recent note that investors will likely be watching closely for updates around rising hardware prices and the company’s investments in AI, along with the concentration of its backlog.

Microsoft is projected to report fiscal fourth-quarter revenue of $87.71 billion, up nearly 15% year-over-year, with revenue in its Intelligent Cloud segment seen growing 28% to $38.24 billion. Adjusted earnings per share are projected to come in at $4.25, up from $3.65 a year ago, according to estimates compiled by Visible Alpha.

Analysts are overwhelmingly bullish on Microsoft. Eleven of the 12 analysts with current ratings tracked by Visible Alpha consider it a “buy,” with one neutral rating. Their mean price target of $549 would suggest 40% upside from Tuesday’s close.

This article has been updated since it was first published to reflect more recent prices and analyst estimates.