The Fed's January meeting takes place this week and all eyes will be on the central bank's monetary statement and Chair Jerome Powell's speech.
The focus on the Fed will, however, not be the only highlight event likely to inform investor sentiment after a volatile week that saw stocks pummeled.
The week also sees major Wall Street companies release earnings results, including tech giants Apple (AAPL) and Microsoft (MSFT). Apart from that, markets are also likely to react to geopolitical events around Russia and Ukraine.
Fed’s meeting this week
The Fed will hold the first of its meetings in 2022 on Tuesday and Wednesday. The FOMC meeting concludes with a commentary on monetary policy and a press conference by Jerome Powell.
Rather than focus on the expected rate hikes in March, investors will likely watch out for the Fed's language in light of rising inflation and last week's stock market rout.
Wednesday will also see the Bank of Canada release a statement on interest rates, which observers say is highly likely. If the BOC elects to hike rates, stocks, as well as the Canadian Dollar, could see significant volatility.
Russia and Ukraine are not at full-blown war, but the markets are likely to watch developments and headlines from the region. If last week's talks between Russian and US diplomats bear fruits, the tension could be diffused a little bit and see further moves aimed at solidifying an agreement.
According to Jeroen Blokland, the founder and head of research at investment platform True Insights, investors need also to pay attention to the geopolitical risks, not just the Fed.
#Russia's stock market is down 13% in the last 7 trading days and 27% since late October. Reflecting growing tensions between Russia, #Ukraine, the US, and the Eurozone, which are the most tangible geopolitical risks impacting markets. It's not just about the #Fed #geopolitics pic.twitter.com/fGYu3xOMYh
— jeroen blokland (@jsblokland) January 23, 2022
Apple, Microsoft, and Tesla earnings
Netflix shares dumped last week after its quarterly earnings results, with the previous week also seeing JPMorgan and Citigroup stocks slip.
The earnings season continues this week with some blockbuster reports expected from leading tech companies. While the earnings could fuel a rebound across sectors and the market, any drawdown for the tech giants and other top corporate names could catalyse fresh declines.
On Monday, IBM (IBM) reports after market close.
On Tuesday, Microsoft (MSFT), General Electric (GE), Lockheed Martin (LMT), Johnson & Johnson (JNJ), Verizon (VZ), and Invesco (IVZ) report.
Tesla (TSLA) will report on Wednesday after the closing bell while Boeing (BA), Nasdaq Inc. (NDAQ), Intel (INTC), and Xilinx (XLNX) will also highlight earnings on the day of the highly anticipated FOMC commentary.
Apple (AAPL), Robinhood (HOOD), and Visa (V) will be the highlights on Thursday, and on Friday, we have Colgate-Palmolive (CL), Caterpillar (CAT), and VF Corp. (VFC).