Bullstory Research July 27, 2026
FOMC 2Monthly meeting preview: Powell’s words can change my stocks
Key takeaways
In the market, 2at the FOMC this month, 0.25the chance of a percentage-point cut is seen as 65%. Chairman Powell’s remarks will determine whether technology stocks rebound or correct. The wording in the statement and comments on inflation and employment will reveal the pace and direction of cuts.
2Tech stocks either rebound or come under pressure depending on the outcome of the monthly FOMC meeting. Which way they move depends less on the numbers than on a single remark from Chair Powell. This article summarizes three points to watch and how each outcome affects stocks.
Where are rates now
The Fed has cut the policy rate three times since the second half of 2025the current policy rate is 4.25 to 4.50%.
The market sees a 2% point additional cut at this 0.25month’s meeting with a probability of 65%, and expects a total of 2026% point more cuts by the end of 0.75.
Three things to watch at the meeting
First, how Powell reads the inflation data.
1Monthly consumer price inflation was 2.6% year over year, close to the Federal Reserve’s target (2%). However, service prices are still above 3.5%. If Powell shows confidence in a slowdown in service-price inflation, the pace of rate cuts could quicken.
Second, is employment becoming a case of "too good to be bad"?
Nonfarm payrolls are increasing by about 15ten thousand jobs a month, and the unemployment rate is 4.0%. If employment stays this solid, the Federal Reserve has no reason to rush. The greater the confidence that it has succeeded in a soft landing (bringing down inflation without a recession), the slower the pace of cuts may become.
Third, changes in the wording of the statement.
At this meeting, the dot plot (the chart in which Fed members mark their own expected path for interest rates with dots) will not be updated. Instead, you have to read the future direction from the statement and the remarks at the press conference. In particular, if the phrase "cautious about further adjustments" appears, that is a signal that the pace of cuts will slow.
How will my stocks change depending on the outcome
| Scenario | Fed action | Stock market impact |
|---|---|---|
| A | 0.25percentage point cut + dovish remarks | Tech stocks strengthen, bond yields fall, the dollar weakens → positive |
| B | Hold + neutral remarks | Short-term correction possible, expectations for cuts in the second half of the year remain intact → limited impact |
| C | Hold + hawkish remarks | Growth stocks correct, bond yields rebound, the dollar strengthens → negative |
Even if shaken by short-term results, the direction of the rate-cut cycle itself has not changed. Reading the context of Powell's remarks is more important than the sharp swings on the day of the meeting.
Frequently asked questions
FOMC 2What immediate impact could Powell’s remarks at this month’s meeting have on short-term rates and stock prices?
Just one line from Powell can move short-term rates and stock prices immediately. If his remarks are dovish, short-term rates and bond yields fall, and technology stocks come under upward pressure. If his remarks are hawkish, rates and the dollar rise, and growth stocks come under pressure.
If Powell signals a change in the Fed’s rate path, which sector stocks should be sold first?
If he signals a slower pace of cuts, growth stocks and tech stocks are the first to adjust. Defensive sectors and dividend stocks, which are less affected by interest rates, are relatively less volatile.
2If the word “patience” disappears from the monthly FOMC statement, how do growth stocks react?
If the statement no longer uses cautious language, the chance of cuts rises and tech stocks tend to receive a positive boost. Conversely, if the cautious wording remains, growth stocks may weaken.
If Powell’s speech sounds dovish, how does the relationship between bond yields and tech stocks change?
A dovish outlook lowers bond yields, making the inverse correlation between tech stocks and bond yields more pronounced. Lower rates work in favor of tech stock profitability.
Which phrases in the FOMC statement and press conference have a greater impact on financial stocks?
Remarks at the press conference shape the market’s interpretation, so they have a more immediate and larger effect on financial stocks. However, the wording of the statement is also reflected immediately as a signal about the interest-rate path.