Wall Street Awaits: Earnings Reports and US Labor Market Data

The coming week on Wall Street will be marked by two central axes: US employment data to be published on Friday, and the continuation of the second-quarter earnings season, in which three prominent Israeli companies stand out this week - Tower, Nova, and Wix.

All this is happening while Wall Street is still digesting a dramatic week: the Federal Reserve left interest rates unchanged, but with a hawkish tone, and tech giants provided a mixed picture that left investors searching for direction.

The Fed left the interest rate unchanged, although three out of 12 members of the monetary committee opposed and actually supported a hike - a sign that inflationary pressure is still here. The Core PCE price index, the Fed's preferred measure, rose by 3.3% over the last year, and it is well above the 2% target.

At the same time, tech reports split the market: Microsoft surged on the back of an optimistic cloud forecast, while Meta plummeted after reporting a drop in cash flow. The S&P 500 index remains about 1.6% below its peak and still shows an increase of more than 9% since the beginning of 2026.

The July jobs report (Nonfarm Payrolls), to be published on Friday, is the week's most important macro event. Analysts and economists expect an addition of about 83,000 jobs and a slight increase in the unemployment rate to 4.3%.

The significance is especially great now: the new Fed Chair Kevin Warsh has reduced the bank's communication transparency, so every economic figure is examined under a magnifying glass. "The change in the Fed's approach to transparency and communication may lead to volatility around key data," estimated Jim Baird, Chief Investment Officer at Plante Moran.

Interest rate futures are currently pricing in a 64% chance of a hike as early as the September meeting - so a hotter-than-expected employment figure could strengthen this bet.

Israeli Companies in Focus

Tower will report on Tuesday before the opening and will provide a forecast for the third quarter - the figure that interests investors more than the results themselves. Nova will report on Thursday. Both are benefiting from the surge in demand for artificial intelligence infrastructure, and analysts are optimistic about them.

On the other side stands Wix, which reports on Tuesday: the stock has fallen about 47% since the beginning of the year and is trading about 85% below its peak, following rating downgrades from Morgan Stanley and Raymond James due to a lack of clarity regarding continued growth. Its earnings per share are expected to drop by about 50% compared to last year. This contrast illustrates how the AI wave rewards hardware manufacturers but punishes software companies whose story is being questioned.

The earnings week is also packed with heavy American names. Chipmaker AMD will report on Tuesday and will be tested against the backdrop of the rally in the sector, alongside pharmaceutical giant Eli Lilly, data company Palantir, and Caterpillar.

The central event is the first quarterly report of Elon Musk's SpaceX, whose stock weakened after the surge in the first days after the IPO. In general, S&P 500 company earnings for the quarter are growing at a strong double-digit rate, and this is the main reason for the optimism. "Overall, the earnings picture should provide stability," noted Yung-Yu Ma of PNC.

The Israeli saver has a double exposure here. On one hand, the S&P 500 index is at the core of pension funds, provident funds, and tracking funds. On the other hand, Tower and Nova are also traded in Tel Aviv and are widely held in Israeli portfolios, so their reports will directly affect the local stock exchange. In addition, the interest rate path in the US continues to support the dollar and affects risk appetite in the markets.