Starting today, the global market will enter the

Source: Wall Street News

Positive signals have emerged from China-U.S. trade negotiations, but global markets must remain cautious. Starting from this Wednesday, global markets will enter a crucial 72-hour window.

A series of intensive U.S. economic data, earnings reports from tech giants, and key trade policy milestones will take turns in the spotlight. The combination of these events may set the tone for market trends for the remaining part of the year.

This round of market tests will kick off on Wednesday, when the U.S. releases its second-quarter GDP data, followed by the Federal Reserve's interest rate decision a few hours later. Immediately after, tech giants such as Microsoft, Meta, Apple, and Amazon will release their earnings reports after the market closes on Wednesday and Thursday. The highly anticipated U.S. July non-farm payroll report will be released on Friday.

Any one of these events could trigger market volatility. Against the backdrop of U.S. stocks rebounding sharply from their April lows and valuations already being high, this "super week" is seen by the market as a severe test. Mike O'Rourke, an analyst at Jones Trading, stated that this week "could prove to be the most critical week of the year," and its outcome will test Wall Street's resolve.

At the same time, market attention is also turning to the East. China's Political Bureau meeting is imminent, and investors are closely watching for new signals on China's economic policies.

Intensive Release of U.S. Economic Data

In the second half of this week, a series of heavyweight economic data will provide key clues for judging the health of the U.S. economy. According to the Atlanta Fed's forecast, the U.S. second-quarter GDP is expected to grow at an annualized rate of about 2.9%, mainly reflecting a decline in imports. Earlier in the first quarter, inventory-related import surges had dragged down GDP.

In terms of monetary policy, although President Trump insists that interest rates should be significantly lowered, the market generally expects the Federal Reserve to keep the interest rate range unchanged at 4.25% to 4.5% at its meeting on Wednesday.

Investors will focus on whether there is a growing divide between Federal Reserve Chairman Powell and other policymakers—with one side wanting to further assess the impact of tariffs on inflation before cutting interest rates, and the other side hoping to act as soon as possible.

Finally, Friday's employment report is expected to show that the U.S. added 115,000 jobs in July, down from 147,000 in the previous month.

According to a FactSet survey, unexpected data in either direction could trigger cross-market volatility. Charlie McElligott, a derivatives strategist at Nomura Securities, pointed out that the "absolutely crowded data schedule" means there is "significant event risk" at the end of the month.

Earnings Reports of Tech Giants Test Market Strength

Alongside the release of economic data, the U.S. stock earnings season has entered its peak. Microsoft and Meta are scheduled to report earnings after the market closes on Wednesday, followed by Apple and Amazon on Thursday. The total market value of these four tech giants exceeds $11 trillion, and their stock performance has a pivotal impact on Wall Street.

In recent weeks, U.S. stocks have hit record highs, boosted by optimism that the economy remains resilient and that artificial intelligence will drive strong growth in the giants' businesses.

However, the rapid rise in the market has also made some analysts and investors uneasy. The S&P 500 index has risen 8.3% this year, with a forward 12-month price-to-earnings ratio as high as 22 times.

Against this backdrop, the results and outlooks of tech giants will directly test whether the current high market valuations are reasonable.

Trump's Tariff Deadline Approaches

Uncertainty also comes from the trade sector. The Trump administration's deadline for imposing "reciprocal" tariffs on countries with which it has not yet reached trade agreements is 12:01 a.m. Washington time on August 1.

In recent months, investor sentiment has eased as the U.S. reached trade agreements with major partners such as the European Union, Japan, and the United Kingdom, and extended the tariff suspension with China by 90 days. Wall Street banks have thus lowered their forecasts for the probability of a potential recession. Investors generally bet that Trump will avoid implementing tariffs that could trigger excessive market volatility, or postpone them until after agreements are reached.

However, risks remain. Matt King, global market strategist at Satori Insights, said: "Trump is still Trump, and tariff risks and related uncertainties persist."

China's Policy Direction Attracts Attention

In China, the upcoming Political Bureau meeting has become another focus of the market.

Huatai Research analysis believes that based on the two macro backgrounds—economic data in the first half of the year showing resilience, and Sino-U.S. relations expected to maintain a certain degree of certainty and marginal improvement before October—the focus of the Political Bureau meeting may be on:

1. Judgment of the economic situation. After recent weakening of high-frequency data such as real estate, consumption, and exports, will the policy tone for stabilizing the property market and boosting consumption be further strengthened?

2. Whether there will be a further strengthening of the judgment that real estate is "stopping the decline and stabilizing," and whether the subsequent policy tools can be clarified?

3. Policy goals, task decomposition, and implementation paths for "anti-involution" and capacity reduction;

4. Fiscal and monetary policies may continue the policy tone since April, with low market expectations.

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