As Congress bickers, investors look to Jerome Powell

So far, the Fed has been out front in girding the US economy for a crippling recession. In mid-March, Powell pushed interest rates close to zero. Since then, the central bank has added more than $2 trillion in assets to its balance sheet, while launching lending programs for needy companies, which have since been extended to the end of the year.

"No one can say the Federal Reserve has under-delivered during the current crisis," James Knightley, ING's chief international economist, said in a recent research note.

But the crisis isn't over, with the United States logging more than 1,200 coronavirus-related deaths on Tuesday. That raises questions about how confident the Fed is in its current economic projections, and what it could do to ease the economic pain if harsh restrictions are reimposed.

Coming up: The Federal Reserve announces its latest monetary policy decision on Wednesday. The focus for investors will be Powell's press conference.

Powell is due to face tough inquiries about the state of the US recovery. He's also likely to be asked about the importance of Congress agreeing to another big round of spending before the August recess.

The latest: Divisions among Republicans are hampering early talks as GOP senators dismissed key pieces of their own leadership's proposal, which was unveiled Monday.

The revolt, which spans the ideological spectrum, represents the latest challenge for Majority Leader Mitch McConnell as he seeks to salvage the GOP's opening bid and begin negotiations with Democrats.

Wall Street is warning that Congress' ability to offer massive support in conjunction with the Fed is crucial if the economy's comeback is to be sustained.

A key characteristic of this recession is the sharp drop in household income, noted Paul Donovan, chief economist at UBS Global Wealth Management. That's something that only Congress can tackle in earnest.

"Loss of income can be addressed by policy — but it is fiscal policy, not central bank policy, that is going to have the income impact," he told clients Wednesday.

Congress is about to grill tech's biggest CEOs

For over a year, Congress has been investigating Amazon, Apple, Facebook and Google, set on determining whether the companies have abused their power and dominance in the online marketplace.

Now, the CEOs of those companies are set to testify before lawmakers on Wednesday in the biggest hearing of its kind since Microsoft's Bill Gates went to Washington in 1998, my CNN Business colleague Brian Fung reports.

While most of the executives have appeared before Congress previously, they've never faced a situation quite like this one. All four will testify alongside one another — and in a pandemic-driven twist, they will all attend the hearing virtually, using Cisco's WebEx conferencing platform.

Expect lawmakers to pepper the companies with highly specific questions about their businesses based on documents and other evidence gathered throughout the 13-month probe. Amazon is under scrutiny for its use of seller data; Apple, over its app store policies; Facebook, for its acquisition strategy and its dominance in online advertising; and Google, for its own practices in search and advertising.

The rebuttal: For their part, the companies are expected to argue that they have helped countless entrepreneurs and small businesses, and have made America a leader in innovation amid rising competition from China.

The high-profile event has all the makings of a spectacle. But any fireworks will simply reflect the high stakes for these tech titans, who face multiple probes by regulators at the federal and state levels, as well as overseas. Those investigations could lead to lawsuits or fines for the world's biggest, wealthiest corporations.

Remember: These companies, together with Microsoft, now account for more than a fifth of the market value of the S&P 500. Apple alone is worth more than $1.6 trillion, more than Germany's entire DAX 30 index.

Watch this space: Significant attention is likely to fall on Amazon's Jeff Bezos. The world's richest man has never testified before Congress, and it's rare to see Bezos interviewed in an unscripted or unfriendly setting.

McDonald's and Starbucks spend big to keep doors open

Nearly all McDonald's stores around the world were open by the end of June. But the costs of running a fast food chain during a pandemic have been substantial.

See here: The company said Tuesday that it has spent more than $200 million to help with marketing for franchisees as sales have struggled.

So far, it hasn't been enough to avoid a massive drop in revenue. Sales sank 30% between April and June compared to a year ago, driving profits down 68% to nearly $484 million.

Starbucks has also reopened the vast majority of its stores, but booked a net loss of $678 million last quarter. CFO Patrick Grismer told analysts Tuesday that certain costs, such as cleaning supplies and associated labor, would likely "persist due to our new way of operating."

Still, both companies said they're getting more efficient, touting their quick prioritization of delivery and easy pick-up.

McDonald's CEO Chris Kempczinski, while acknowledging the outlook is hazy, said the company's darkest days are probably behind it.

"In many markets around the world, most of notably in the US, the public health situation appears to be worsening," Kempczinski said on McDonald's earnings call. "Nonetheless, I believe that [the second quarter] represents the trough in our performance as McDonald's has learned to adjust our operations to this new environment."

Investor insight: Shares of McDonald's fell 2.5% on Tuesday. Shares of Starbucks, which beat Wall Street's expectations despite a dismal performance, are up more than 5% in premarket trading.

Up next

Boeing, Garmin, General Electric, GM, Sanofi and Spotify report results before US markets open. PayPal follows after the close.

Also today:

The CEOs of Apple, Facebook, Amazon and Alphabet testify before Congress starting at 12 p.m. ET.The Federal Reserve releases its latest monetary policy decision at 2 p.m. ET. A press conference with Chair Jerome Powell will follow.

Coming tomorrow: The biggest US tech companies report earnings.