BlockBeats News, July 27th. This week, the Federal Reserve, Bank of Japan, and Bank of England will successively announce their interest rate decisions. The US GDP for the second quarter, Core PCE, and earnings reports from several tech giants will also be released, subjecting monetary policy, economic growth, and corporate profits to a simultaneous market test. Amid the interaction of energy prices, tariff policies, and AI capital expenditure, the market is reevaluating the future global cost of capital, rather than simply betting on interest rate cuts or hikes.

Although there have been signs of a temporary easing of tensions in the Middle East recently, the US and Iran continue to negotiate through Oman on issues related to the Strait of Hormuz. Iran has also expressed its willingness to maintain a ceasefire and engage in talks. However, the risks to navigation in the Strait of Hormuz and the Red Sea have not been completely eliminated. Additionally, the Houthi rebels continue to threaten energy shipments, keeping the uncertainty of oil supply intact. Meanwhile, the US Department of Energy declared an emergency in 17 states due to high temperatures, once again highlighting that energy demand remains high. Energy prices may still be a key factor driving inflation in the future.

On the other hand, President Trump has expanded tariffs once again, threatening the EU with a Section 301 investigation. The global supply chain cost uncertainty continues to accumulate amid ongoing legal challenges. The tech industry is presenting another form of inflation pressure, with Qualcomm raising chip prices, intensifying the competition in AI models. Companies like Samsung, SK Hynix, and NVIDIA are increasing their investments, indicating that the global AI infrastructure competition is still heating up. However, market focus has shifted from "how much investment" to gradually questioning "when will it generate sufficient returns." Major earnings reports from Microsoft, Meta, Apple, Amazon, Qualcomm, and others this week will directly determine whether AI capital expenditure is still enough to support the currently high valuations of tech stocks.

Therefore, what the market truly needs to confirm this week is not just whether the Federal Reserve will maintain interest rates, but whether Powell will further emphasize the risk of high inflation, and whether corporate earnings reports can prove that AI investments are translating into profitability. If Core PCE and GDP continue to show resilience, the Fed will have a longer runway to maintain high interest rates, and even the possibility of discussing rate hikes will increase. Conversely, if economic data starts to slow down while companies continue to expand capital expenditure, the market focus will shift back to corporate cash flow and valuation correction pressure.

This week will be a crucial turning point for global asset pricing in the second half of the year, determining whether funds will continue to chase the high-growth narrative or return to evaluating the value of cash flow and fundamentals.