The Federal Reserve held its target range at 3.50–3.75% on July 29 by a 9-3 vote, the most divided decision since 2016. The statement described economic activity as expanding at a solid pace with strong productivity growth and capital investment, and job gains keeping pace with the workforce, while flagging elevated uncertainty tied in part to the Middle East conflict. Three regional presidents dissented in favor of a hike. Wednesday's minutes, released three weeks after the decision as is standard practice, are the market's first detailed look at that internal debate, and they land in the same week as Target's earnings.
Markets enter the week at all-time highs: the S&P 500 touched a fresh record this week and three last week, and the Russell 2000 hit all-time highs three times this week in a broadening of the rally beyond mega-cap tech. Investors are looking ahead to the Fed's Jackson Hole symposium later this month and to Nvidia's earnings the week after next. In the meantime, four large caps from this week's watchlist report across four different sectors: Baidu and Alibaba frame the AI-and-consumer story out of China, Target tests its US retail turnaround, and Deere tests its own call that the agricultural equipment cycle has bottomed.
Baidu's Q1 showed a clear split: AI-native marketing and Baidu Core AI revenue both grew strongly, but adjusted EBITDA fell as core advertising revenue absorbed pressure from AI chatbots displacing traditional search traffic. This report tests whether AI monetization is growing fast enough to offset that advertising erosion.
Target's Q1 turnaround under new CEO Michael Fiddelke was broad-based, with traffic, digital sales, and non-merchandise revenue (Roundel ads, Target Circle 360, Target+) all growing double digits in places. Shares are up roughly 50% year-to-date heading into this report; the question is whether that momentum held through Q2 or was a one-quarter bounce.
Alibaba's prior quarter showed cloud strength (revenue up 38%, AI-related product revenue at 30% of external cloud revenue for an 11th straight quarter of triple-digit growth) getting overwhelmed by instant-commerce losses that crushed adjusted EBITA 84%. This report needs to show those losses narrowing, not just cloud and AI continuing to grow.
Deere's Q2 beat expectations as a 29% surge in construction and forestry sales offset continued weakness in large agriculture, and management raised its construction growth target to roughly 20% from 15%. The company has called fiscal 2026 the bottom of the ag cycle with recovery expected in 2027; this report is the next data point on whether that call is holding.
The July statement cited Middle East-linked uncertainty even as it described solid growth. The minutes should clarify whether the three dissenters were reacting mainly to inflation risk, growth strength, or both.
Both companies are showing strong AI and cloud growth alongside pressure elsewhere, Baidu in core advertising and Alibaba in instant commerce. Together they're a read on how China's AI buildout is translating into profit, not just revenue.
A strong Q1 under new leadership drove the stock up roughly 50% year-to-date. Q2 needs to show the traffic and digital-sales momentum wasn't a single-quarter bounce.
Construction and forestry strength has offset large-ag weakness for two straight quarters. The market wants to see whether that pattern continues or whether large ag stabilizes on its own.
The Russell 2000 hit all-time highs three times this week alongside fresh S&P 500 records, a signal that participation in the rally is widening ahead of Jackson Hole and Nvidia's report the week after next.
NAHB sentiment, housing starts, pending home sales, and existing home sales all land this week, giving a fuller picture of demand at current mortgage-rate levels than most weeks offer.
| Ticker | Company | When | Notes |
|---|---|---|---|
| BIDU | Baidu | Tue BMO | 8:00 AM ET call. See spotlight. |
| TGT | Target | Wed BMO | See spotlight. |
| BABA | Alibaba | Thu BMO | 7:30 AM ET call. See spotlight. |
| DE | Deere & Company | Thu | 9:00 AM CT call. See spotlight. |