Technology Earnings and Fed Policy to Shape a Volatile Week Ahead

A busy week lies ahead. The Fed meeting, advance GDP, PCE inflation, and Manufacturing PMI headline the economic calendar. On the earnings front, Microsoft, Alphabet, Amazon, and Meta collectively representing roughly one-quarter of the S&P 500 market cap report quarterly results, making their performance critical to sustaining the recent rally.

With earnings season approaching its midpoint, mega-cap technology continues to carry the load. The Magnificent Seven are expected to post average Q1 earnings growth of 22.8%, compared to just 10.1% for the remaining 493 S&P 500 constituents.

The Middle East ceasefire holds, but the Strait of Hormuz remains closed, keeping global energy markets on edge. A diplomatic resolution still appears the most likely outcome, though meaningful progress has yet to materialise.

Markets have been pricing out Middle East tail risk in recent weeks, with global equities fully recouping the March sell-off. That recovery leaves stocks vulnerable in the near term should diplomatic talks hit a setback.

Interest Rate futures markets are pricing in a 99% probability that the Fed will hold rates unchanged at the conclusion of its two-day meeting on Wednesday a near-certainty that reflects broad consensus for a pause following recent cuts.

Global Markets are also watching the expected nomination of Kevin Warsh as Jerome Powell’s successor at the Fed. The prospect is prompting traders to reassess the pace of rate cuts later this year, particularly as core PCE inflation remains well above the 2% target.

The Indian rupee has breached ₹94 per USD for the second time this month, pressured by a surge in Brent crude past $100 per barrel. These headwinds, compounded by a contraction in core industrial sectors, prompted Moody’s to cut its FY27 GDP growth forecast for India to 6%.

India and New Zealand are set to formally sign their Free Trade Agreement (FTA) today. Under the agreement, all 8,284 Indian export products will receive duty-free access to the New Zealand market.

Sun Pharma announced that it has entered into a definitive agreement to acquire all outstanding shares of Organon for US$14.00 per share in an all‑cash transaction, with an enterprise valuation of US$11.75 billion.

The merger will place Sun Pharma among the top 25 global pharmaceutical companies, with a combined revenue of roughly US$ 12.4 billion. It will become a top-3 global player in Women’s Health and the 7th-largest global biosimilar player.

Nifty extended its losing streak to three days on Friday amid broad-based selling, spearheaded by IT stocks. Despite the late recovery, the Nifty 50 closed 275 points lower at 23897, culminating in a weekly loss of 1.90%. Next support for the Nifty is placed at 23790, followed by 23550. On the upside, 24200 is the level to watch for a bullish trend reversal.

Indian markets are poised to open higher on positive global cues, buoyed by the signing of the India–New Zealand Free Trade Agreement and Sun Pharma’s landmark US$11.75 billion takeover of Organon.