Rate Hike Odds Just Tripled 😳

Welcome back to the Day Trading newsletter 📈

Oil punched through $100 a barrel, Big Tech beat on revenue and fell anyway, Intel surged on a blowout quarter, and the 10-year Treasury yield hit an 18-month high.

All of it feeds into one question: what does the Fed do Wednesday?

Let’s get into it 👇️ 

📅 Tuesday 7/28 - Consumer Confidence (10am ET): First read on household mood with oil back near $100 and grocery sticker shock in the headlines. A weak print would complicate the Fed's hawkish math.

📅 Wednesday 7/29 - Fed rate decision (2pm ET): The main event. A hold at 3.5%–3.75% is the base case, but hike odds near one-in-three make this the least predictable meeting in years. Warsh's 2:30pm press conference — and the dissent count — matter as much as the decision.

📅 Wednesday 7/29 - Microsoft + Meta earnings (after close): The AI capex question lands on the two biggest spenders after Alphabet's free-cash-flow shock. Any sign of restraint could rally chip stocks' customers — and sink their suppliers.

📅 Thursday 7/30 - Apple + Amazon earnings (after close) + Q2 GDP (8:30am ET): The advance GDP estimate shows whether the economy carried momentum into the oil shock, then the two biggest consumer-facing tech names close out Big Tech week.

📅 Friday 7/31 - PCE inflation (8:30am ET): The Fed's preferred inflation gauge, with core expected around 3.4% annually. A hot number here all but confirms a September hike fight.

📈 Intel posted its strongest quarterly revenue growth in roughly 15 years, sending the stock up as much as 13% after hours Thursday. Adjusted earnings of 42 cents a share doubled the 21 cents expected on $16.1 billion in revenue, up 25%, powered by a 59% surge in its data-center and AI business (CNBC)

💳 American Express sank about 6% Friday even though earnings beat expectations. EPS of $4.53 topped the $4.40 consensus, but expenses grew 12%, the tax rate jumped to 24%, and the full-year profit outlook stayed put at $17.30- $17.90 a share so investors focused on rising costs instead (Yahoo Finance)

🏦 The 10-year Treasury yield hit 4.70% Thursday, its highest level since January 2025, as $100 oil rekindled inflation fears. The 30-year climbed to 5.19%. Rising yields push up borrowing costs on everything from mortgages to corporate debt, and some strategists now see the 10-year testing 5%. (CNBC)

📉 Bitcoin ETFs shed $225 million Thursday, snapping a seven-day inflow streak that had pulled in nearly $1 billion. BlackRock's IBIT accounted for $202.5 million of the outflows as bitcoin slipped below $65,000. Ether ETFs went the other way, extending their inflow streak to five days. (Decrypt)

💨 The U.S. economy is speeding up, not slowing down: July's flash composite PMI hit 53.6, an eight-month high. Services activity jumped and employment ticked up for the first time in three months. Good news, awkward timing — a hot economy gives the Fed's hawks one more reason to push for a hike. (Seeking Alpha)

🛒 Grocery prices are up 33% since the start of 2019: the biggest jump in half a century, per government figures. In the seven and a half years before that, prices rose just 6.4%. New AP reporting finds households across the country couponing, trading down, and cutting favorite foods entirely. (AP)

The Federal Reserve meets Tuesday and Wednesday, and for the first time in years, a rate HIKE is a live possibility.

The odds of a quarter-point increase more than tripled in a week (from about 12% to as high as 38%, according to CME Group's FedWatch tool) after oil broke through $100 a barrel and revived fears that inflation, already above the Fed's 2% target for five years running, is about to get another leg up.

The base case is still a hold at 3.5%–3.75%, which would be the fifth straight meeting without a move.

This is only Chair Kevin Warsh's second meeting, and he has deliberately made the Fed harder to read. He's vowed to give less "forward guidance" and even scrapped individual economic projections in June.

That means Wednesday's decision can genuinely surprise markets in either direction, and surprises are what move stocks, bonds, and everything priced off interest rates.

The committee itself is split: JPMorgan and TD Securities both expect hawkish dissents.

JPMorgan sees at least two, likely from Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan. Logan has said inflation "has been too high, for too long."

Bank of America calls the meeting a close call that comes down to Warsh himself, and still forecasts three quarter-point hikes this year.

What to watch:

• The decision drops Wednesday at 2pm ET, with Warsh's press conference at 2:30.

• Even if rates don't move, count the dissents. The more officials voting to hike, the more likely September is the real showdown.

• And keep an eye on oil: crude eased back under $100 Friday as U.S.-Iran diplomacy showed signs of life, and a sustained pullback would take a lot of pressure off the Fed.

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⚠️ Disclaimer: Not financial advice. Do your research before making any trades.