06:28 AM EDT, 07/29/2024 (MT Newswires) -- US equity investors will focus this week on potential signals from the Federal Reserve regarding the beginning of the policy easing cycle in September and mega-cap technology earnings to judge whether a rotation out of the sector has legs.

* The probability of the Fed leaving interest rates unchanged on July 31 is 96%, according to the FedWatch Tool as of early Monday morning. But, the likelihood of a 25 basis-point cut in September is 88%.

* In the opening paragraph of the Fed's policy statement this week, investors ought to watch out for wording whether "there has been modest further progress" toward achieving the Fed's 2% inflation target or something that signals more confidence, according to a note from Scotiabank Friday.

* Investors also must keep an eye on whether the third paragraph's reference to the Fed holding off on rate cuts "until it has gained greater confidence" that inflation is moving toward 2% is stronger and signals the central bank is achieving this goal, the note added.

* More data that investors will look out for this week include JOLTS job openings on Tuesday, which will help to understand whether the increased number of unfilled jobs in May was just an aberration along a five-month downward trend, and Friday's nonfarm payrolls as well as wage growth.

* US equity indexes closed mixed, and most Treasury yields dropped last week. Investors booked profit in technology and communication services as the Fed's preferred inflation gauge showed moderation, helping add to confidence the policy easing will likely begin in September, while Tesla (TSLA) and Alphabet's (GOOG, GOOGL) posted disappointing quarterly results. Technology and communication services were the worst-performing sectors last week and over a month.

* Major earnings reports due this week include Apple ( AAPL ) , Amazon.com ( AMZN ) , Microsoft ( MSFT ) , and Meta Platforms ( META ) . Some of the other heavyweights include Starbucks ( SBUX ) , Exxon Mobil ( XOM ) , and Chevron ( CVX ) .