Earnings flood and Fed meeting pose pivotal tests for shaky AI market rally
SPY•Investors face a busy week of earnings led by Alphabet, Microsoft and Amazon, alongside a Federal Reserve rate decision on Wednesday. Futures indicated a 5% chance of a rate hike then and an 80% chance of a hike in December.
1. Earnings test AI spending
Results from Alphabet and Microsoft are due Wednesday, followed by Amazon on Thursday, as investors assess hyperscalers’ capital-spending plans and returns from their AI investments. Hyperscaler capital spending is expected to be around $800 billion this year. Third-quarter S&P 500 earnings were on pace to rise more than 32% year over year, with next week the busiest of the reporting season.
2. Fed decision ahead
The Fed is due to announce its policy decision Wednesday. Fed fund futures late Thursday suggested a 5% chance of a hike at that meeting and an 80% probability of a hike in December. Investors will watch for comments from Fed Chair Kevin Warsh about the rate path.
3. Other major results
The reporting calendar also includes Intel, Sandisk, Eli Lilly, Exxon, Chevron and Caterpillar. The article says the S&P 500 had risen about 12% in 2026, while weakness in technology shares and disappointing results from Meta and Lam Research had put investors on edge about the AI trade.
