Week ahead financial markets: 5 things to watch

Tesla (NASDAQ: TSLA) is set to be the first among the "Magnificent Seven" tech companies to release its earnings as the corporate earnings season heats up. Meanwhile, global finance leaders are convening in Washington, and oil prices are expected to remain volatile. Here’s a snapshot of what to watch week ahead financial markets.

1. Tesla Reports Earnings

As earnings season ramps up, Tesla will be among the first major U.S. tech companies to report, with results expected after market close on Wednesday.

Tesla's shares have faced challenges this month, particularly following the introduction of its highly anticipated robotaxis, which some investors found lacking in concrete details. Year-to-date, Tesla's stock has underperformed compared to the S&P 500, losing around 11%, while the broader index has gained 22.5%.

Despite a more optimistic outlook for the U.S. economy following a strong jobs report and last month’s 50 basis points rate cut from the Federal Reserve, a disappointing earnings report from Tesla could reignite concerns about tech stock valuations.

With the S&P 500 trading at nearly 22 times forward earnings, elevated valuations and high expectations for corporate performance—coupled with potential volatility ahead of the U.S. presidential election—could leave stocks vulnerable to a pullback.

2. Semiconductor Earnings

The upcoming week will also feature results from Texas Instruments (NASDAQ: TXN) and Lam Research (NASDAQ: LRCX), following a turbulent week for the semiconductor sector. Chip stocks fell sharply after ASML (AS: ASML), Europe's largest tech firm, projected lower-than-expected sales and bookings for 2025. However, the sector rebounded when TSMC (BVMF: TSMC34) reported a 54% surge in quarterly profit, exceeding forecasts.

Semiconductor and related equipment stocks make up 11.5% of the S&P 500’s weight.

Other notable earnings reports this week will come from Coca-Cola (NYSE: KO), IBM (NYSE: IBM), General Motors (NYSE: GM), and Verizon (NYSE: VZ).

3. U.S. Data

The economic calendar for the U.S. is relatively light this week, but key updates on the housing sector will be released, including reports on existing and new home sales, durable goods orders, consumer sentiment, and initial jobless claims.

On Wednesday, the Federal Reserve will publish its Beige Book, detailing economic conditions across its 12 districts. Several regional Fed officials will also be speaking throughout the week, including Minneapolis Fed President Neel Kashkari and San Francisco Fed President Mary Daly.

4. IMF Meetings

From Monday, global central bank leaders and finance ministers will gather in Washington for the annual meetings of the International Monetary Fund (IMF) and World Bank. They will discuss strategies for navigating low growth and high debt levels. Last week, the IMF projected that global public debt could surpass $100 trillion by year-end, largely driven by the U.S. and China. High debt levels can lead to negative market reactions and restrict budgetary responses to economic shocks.

Meanwhile, Russian President Vladimir Putin will host a summit of BRICS leaders starting Tuesday, seeking support amid tensions with the West. Leaders from Brazil, India, China, South Africa, Egypt, the UAE, and Saudi Arabia are expected to attend.

5. Oil Prices

Oil prices are likely to remain under pressure after falling around 7% last week. Traders are assessing the weak demand outlook for China, the world’s largest oil importer, and the ongoing conflict in the Middle East.

Brent crude dropped over 7%, while U.S. crude futures fell about 8%, marking their largest weekly declines since early September. Recent data showed that China’s economy grew at its slowest pace since early 2023 in the third quarter, although September’s consumption and industrial output exceeded expectations. Analysts suggest that a combination of economic weakness in China and the shift towards electrification will weigh on demand.

Additionally, uncertainty surrounding the Middle Eastern conflict continues. U.S. President Joe Biden mentioned a potential opportunity to address the Israel-Iran conflict, while Hezbollah has indicated an escalation in its actions against Israeli forces, complicating hopes for a swift resolution.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.