Markets face a heavy schedule this week, led by interest rate decisions from the US Federal Reserve, Bank of England and Bank of Japan. Meta, Microsoft, Apple and Amazon are also due to report earnings, while the latest US inflation figures will provide a clearer view of the outlook for monetary policy.
The Federal Reserve is expected to keep interest rates unchanged on Wednesday. The decision itself is unlikely to surprise markets, so attention will focus on what policymakers say about the next move. Expectations for further rate increases have strengthened, with markets now pricing in the possibility of up to two increases between now and early 2027.
A firmer message from the Federal Reserve could support the US dollar and push bond yields higher. It could also increase pressure on shares with high valuations, particularly technology companies that are sensitive to changes in borrowing costs.
The Bank of England is also expected to leave rates unchanged when it announces its decision on Thursday. Markets still see a possible increase later in the year, although the central bank is expected to remain on hold for longer than the Federal Reserve.
The Bank of Japan will announce its decision on Friday. It is expected to continue moving gradually towards tighter policy, with one or two further increases possible over the same period. The main currency risk is a more cautious Bank of Japan combined with a firmer Federal Reserve. That outcome could weaken the yen further against the dollar.
Meta’s second-quarter results on Wednesday will be one of the week’s main corporate events. Earnings are expected to rise by 1.3% from the previous year to $7.23 per share. Revenue is forecast to increase by 26.6% to $60.2 billion.
The stronger revenue outlook comes with a sharp rise in spending. Capital expenditure is expected to reach $33.7 billion, compared with $16.5 billion a year earlier. Spending is forecast to rise again in the third quarter to $40.5 billion.
This level of investment puts greater focus on whether Meta can turn its spending on infrastructure and artificial intelligence into sustained revenue growth. Strong sales may support the company’s strategy, but slower earnings growth could raise questions about the timing of future returns.
For the third quarter, revenue is expected to rise by 23.2% to $63.1 billion. Earnings per share are forecast to fall by 2.6% to $7.06. The contrast between revenue growth and lower earnings makes margins, operating costs and management guidance especially important.
Meta shares have traded within a broad range since October 2025. Resistance has formed around $680, while support has appeared between $525 and $540. A weaker result could bring the area around $560 into focus, while stronger figures could test resistance near $675. Options markets are pricing in a move of about 8% after the announcement.
US inflation data will provide another major test on Thursday. Headline personal consumption expenditure inflation is expected to fall by 0.1% in June after rising by 0.4% in May. The annual rate is forecast to ease from 4.1% to 3.6%.
Core inflation, which excludes food and energy, is expected to increase by 0.1% during the month. The annual core rate is forecast to fall slightly from 3.4% to 3.3%.
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