Wall St week ahead: As AI rally wobbles, stock market's spotlight turns to earnings
SPY•Investors will focus on earnings from Meta, semiconductor companies, Tesla and others as AI-linked shares pull back. S&P 500 companies are expected to have increased third-quarter earnings by more than 30%.
1. AI stocks retreat
Recent declines in semiconductor and technology hardware shares are testing confidence in the AI trade, which has helped drive the bull market. The S&P 500 remained about 1% below its record high, while other sectors began picking up some of the slack.
2. Hyperscaler spending in focus
Meta is among the companies reporting results in the coming week, alongside chipmakers Lam Research and Texas Instruments. Investors are looking for signs that hyperscalers can grow profits faster than their capital spending; five major AI hyperscalers are expected to raise combined capital spending to about $1.2 trillion next year, according to Goldman Sachs.
3. Other reports and rates
Tesla, Netflix, Procter & Gamble and GE Aerospace are also due to report. Treasury yields and the prospect of further Federal Reserve rate hikes remain in focus; futures pricing suggested most investors expected the Fed to wait until December to raise rates for a second time this year.
