Wall St week ahead earnings flood, Fed meeting will test rickety AI market rally

Investors were disappointed by quarterly reports from Meta and Lam Research.

Meta is one of the hyperscalers spending massively to build out data centres, while Lam is a high-flying semiconductor company, one of a group that has been among the biggest ​AI stock winners.Read: Among AI crowd, some investors position for slower hyperscaler spending growthThree other hyperscalers, Alphabet, Microsoft and Amazon, headline a packed week of quarterly results, including about one-third of S&P 500 companies.

The Fed's interest rate policy meeting ​on Wednesday also could rattle markets."There are a lot of balls in the air," said Nick Giorgi, chief equity strategist at Alpine Macro."Next week, ⁠you have a lot more tech earnings, and right now the market is taking a discerning eye as it relates to all the spending that goes along with artificial intelligence," Giorgi ​said.

"The market's just not giving the benefit of the doubt to companies that are spending a ton of money on building this all out, which to us is actually very healthy, but still ​does augur for some short-term pain."Investors also have their focus trained on the US midterm elections on November 3, with growing bets that the Democrats will wrest control of the US Congress away from President Donald Trump's….

The series of market catalysts could ratchet up volatility over the next couple of weeks and challenge optimism that has helped lift the benchmark S&P 500 index up 11% in 2026.Robust US ​profit growth has underpinned the stock market's gains this year in the face of headwinds including spiking Treasury yields and rising energy costs stemming from the Middle East conflict.With more than ​100 companies having posted results so far,….

Next week is the busiest of the ‌reporting season."I ⁠think earnings will determine whether this … tech pullback is a buying opportunity, or is there a deeper correction ahead," said King Lip, chief strategist at BakerAvenue Wealth Management.

"What we need is just another round of really strong earnings."Alphabet and Microsoft report on Wednesday.

Amazon's results are due on Thursday.

Focus will be on the guidance the companies give on capital spending plans and whether they are seeing returns on the massive outlays.Capital spending from hyperscalers, expected to be around $800 billion this year, is boosting the bottom lines for a wide swath of companies involved in the AI buildout.

But ​investors are wary of the sustainability of such ​spending amid mounting financing costs."Earnings are critical ⁠to the overall confidence level of the AI trade and how much longer the spend will continue," said Kevin Mahn, president and chief investment officer at Hennion & Walsh Asset Management.Fed expected to pause on rates, for nowQuarterly reports next week from chip companies Intel and Sandisk also could influence ​the AI trade.Elsewhere, other….

The Fed raised rates in September for the first time since 2023, in an effort to control above-target inflation, but Fed funds futures late on Friday suggested a less-than-10 % chance the Fed will hike again when it gives its policy statement on Wednesday, according to LSEG data.One factor: Investors are dubious that the Fed will want to ⁠increase rates ​just a week before the midterm elections.However, markets are leaning….

Wall St week ahead earnings flood, Fed meeting will test rickety AI market rally Reuters | Updated 5 minutes ago | Capital spending from hyperscalers is boosting the bottom lines for a wide swath of companies involved in AI buildout.