The daily business briefing: July 26, 2023

Alphabet says search business remains strong, the Fed wraps up meeting expected to end with another rate hike, and more

The Google search logo on a large sign on a stage
Google Search hasn't suffered from competition with newly AI-powered rival Microsoft Bing
(Image credit: Smith Collection / Gado / Getty Images)

1. Alphabet shares rise as Google Search weathers Bing challenge

Alphabet's shares jumped nearly 7% in pre-market trading on Wednesday after the Google parent said its internet search business was strong despite ad market uncertainty. The company said Google Search hadn't suffered from competition with newly AI-powered rival Microsoft Bing. Alphabet shares have gained 39% this year as it generated enthusiasm with its push into artificial intelligence. Microsoft shares fell 4% in pre-market trading after the software giant posted slowing growth in its Azure cloud-services business, overshadowing optimism about its AI tools. "While Microsoft is better positioned than other cloud providers to monetize new AI investments, we think it can take a few quarters for that growth to kick in," said Bloomberg Intelligence analyst Anurag Rana.

Reuters Bloomberg

2. Fed expected to announce its 11th interest rate hike since March 2022

The Federal Reserve is expected to raise interest rates by a quarter percentage point on Wednesday at the conclusion of a two-day meeting, the 11th interest rate hike since March 2022 in an aggressive campaign to fight high inflation. This would give the federal funds rate a target range of 5.25% to 5.5%, a 22-year high. "Economic growth has likely been too firm in recent months for Fed Chair Jerome Powell to signal that Wednesday's increase in the Fed's benchmark short-term rate will be the last of the current tightening cycle, as investors anticipate," according to The Wall Street Journal, but the recent drop in the inflation rate "also makes it hard for central bank officials to firm up plans for any additional rate increase."

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USA Today The Wall Street Journal

3. Gas prices make biggest daily jump in a year

National gas prices jumped 4 cents to $3.64 on Tuesday in the biggest one-day increase since June 2022, according to AAA data. Gas prices are higher than they were in the same period in 2021 but far below what they were in June 2022, when the national average rose above $5 per gallon for the first time. The decline in gas prices in the last year has helped reduce inflation from its peak of 9.1% last summer to 3%, on an annual basis, last month. Oil prices also have risen recently. U.S. benchmark West Texas crude oil was up to $79.64 per barrel on Tuesday, nearly $4 a barrel more expensive than a week earlier but still far below the price of $95.54 on July 25, 2022.

The Hill

4. Stock futures slip ahead of Fed decision, earnings

U.S. stock futures edged lower early Wednesday ahead of more corporate earnings and the Federal Reserve's latest interest rate move. Futures tied to the Dow Jones Industrial Average were down 0.3% at 6:30 a.m. ET. S&P 500 and Nasdaq futures were down 0.2%. The three main U.S. indexes gained on Tuesday, with the Dow rising 0.1% to extend its winning streak to 12 days, its longest since February 2017. The S&P 500 and the tech-heavy Nasdaq rose 0.3% and 0.6%, respectively. The market has priced in a 98% chance that the Federal Reserve will raise interest rates by a quarter percentage point after pausing in June to assess how its campaign to hike rates was affecting inflation and the economy.


5. IMF says world economy showing resilience

The International Monetary Fund said Tuesday in its latest World Economic Outlook that the world economy is recovering despite ongoing problems like stubborn inflation and China's slowing post-pandemic recovery, and could avoid a feared recession. The IMF raised its global growth forecast for this year to 3% from its April projection of 2.8%. It expects U.S. growth, which was 2.1% last year, to slow to 1.8% in 2023 and 1% in 2024. "The global economy continues to gradually recover from the pandemic and Russia's invasion of Ukraine, but it is not yet out of the woods," Pierre-Olivier Gourinchas, the IMF's chief economist, said Tuesday.

The New York Times

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Harold Maass

Harold Maass is a contributing editor at He has been writing for The Week since the 2001 launch of the U.S. print edition. Harold has worked for a variety of news outlets, including The Miami Herald, Fox News, and ABC News. For several years, he wrote a daily round-up of financial news for The Week and Yahoo Finance. He lives in North Carolina with his wife and two sons.