The sharp fluctuation of the “Big Seven” stocks has once again become a driving factor for fluctuations in the US stock market. Investors are likely to face more turbulence this week as the Federal Reserve takes center stage and Wall Street prepares to deal with yet another batch of big tech companies' performance reports.

According to Dow Jones market data, the US stock market closed higher on Friday, and the S&P 500 index and the Nasdaq Composite Index recorded their biggest weekly gains since the beginning of November. Alphabet (GOOGL.O) rose more than 10% after announcing its earnings report on Friday, driving this rebound. The previous trading day, large technology stocks were sold off.

ThierryWizman, a global foreign exchange and interest rate strategist at Macquarie, said that although the stock market may be recovering from the sharp rise in US bond yields over the past two months, recent market fluctuations reflect growing concerns that the corporate profit growth of the best-performing technology companies may slow down.

“Tech stocks rebounded sharply last Friday as Alphabet released strong earnings reports, and some of these concerns were 'dispelled',” he said.

“If technology stocks continue to release strong financial reports, the stock market may be able to completely ignore the interest rate issue,” Wizman said.

Speaking about first-quarter earnings, Lizyoung, SoFi's head of investment strategy, said, “We need big tech companies to get through this difficult time.” “Some of these companies did it; others didn't.”

However, Young believes that investors' “focus on the short term” shift will have the greatest impact on the market in the coming week, and this may continue to be a factor until a more clear path of interest rate cuts appears.

“It feels really boring,” she said. Investors should be aware that short-term fluctuations may be greater than normal markets.”

Federal Reserve Meeting Highlights

Although it is expected that the Federal Reserve will not adjust the policy interest rate from the current 5.25% to the 5.5% range at the end of next week's meeting, investors will be concerned about whether the Fed will put more emphasis on keeping the inflation rate above the 2% annual target.

Anna Rathbun, chief investment officer at CBIZ Investment Advisory Services, said that if policymakers stick to the 2% inflation target, they will be “in a dilemma.”

According to the personal consumption expenditure index (PCE) released by the Federal Reserve on Friday, prices in the US rose again in March, indicating that progress in curbing inflation has stalled. The inflation rate last month was 2.7% higher than the same period last year, while the core index excluding food and energy rose 2.8%.

“If the 2% inflation target softens, then interest rates will be cut at least once by the end of 2024,” Rathbun said on the phone.

Chris Diaz, co-head of Brown Advisory's global taxable fixed income team, said about the market's initial expectations for a sharp interest rate cut this year: “I think Powell's adjustments are too far ahead of schedule.”

“Today, anyone who tells you they're very confident” that “inflation will be in six months” is dishonest, Diaz said. “Inflation has rebounded and unexpectedly in every direction.”

In addition to the minutes of the Federal Reserve meeting, investors will also pay attention to this Friday's employment report. Economists surveyed by the Wall Street Journal expect the number of employed people to increase by 250,000 in April, down from more than 300,000 in March. The unemployment rate is expected to remain at 3.8%.