October 26, 2026
US stock markets are preparing to receive a decisive week, in which investors’ anticipation of the quarterly business results of major technology and artificial intelligence companies coincides with the US Federal Reserve meeting to discuss interest rates, amid existing questions about the market’s ability to maintain its gains in light of the recent wave of volatility.
A CNBC Economic Network report explained that the recent decline in technology sector stocks raised concerns about the sustainability of the momentum that led the bull market in the United States into its fourth year. The Nasdaq Composite Index recorded a limited decline on Friday, affected by the largest daily loss since January, which reflects mounting pressures on technology stocks.
The state of caution increased in the markets following disappointing quarterly results from some companies, most notably Meta and Lam Research, amid intense monitoring of the volume of spending directed to expanding data centers and developing the infrastructure for artificial intelligence applications. “Meta” receives widespread attention for its huge investments, while “Lam Research”, which specializes in semiconductor equipment, benefits from the growing demand associated with this sector.
This week, attention is turning to the financial results of Alphabet, Microsoft, and Amazon, to determine the performance indicators of the technology sector and the sustainability of spending on artificial intelligence. Alphabet and Microsoft are scheduled to announce their results on Wednesday, followed by Amazon on Thursday, as part of an earnings season that witnesses about a third of the companies listed in the Standard & Poor’s 500 index announcing their quarterly results.
These disclosures gain doubly important amid investors’ questions about companies’ ability to transform their massive investments in artificial intelligence into real financial returns. According to LSEG IBES data, the profits of companies listed in the Standard & Poor’s 500 index are heading to achieve growth exceeding 32% in the third quarter on an annual basis, based on the results of more than 100 companies that have announced their numbers so far.
In this context, King Lip, chief strategist at Baker Avenue Wealth Management, confirmed that the expected results will determine whether the recent decline is an opportunity to buy or the beginning of a broader correction, stressing that the continued rise of stocks requires achieving strong results that support the valuations of current companies.
Despite the pressures of rising Treasury yields and increasing energy costs resulting from the conflict in the Middle East, US stocks continued to achieve gains supported by strong corporate profits during the current year. The markets are closely monitoring the capital spending plans of major cloud computing companies, which are estimated at about $800 billion during the current year, despite the high financing costs raising questions about the continuation of these levels of spending in the future.
In addition, investors are awaiting the Federal Reserve meeting on Wednesday amid inflation concerns and the path of monetary policy, with anticipation of interest rate decisions and the future directions of the central bank. Futures data on Friday showed a probability of less than 10% for a rate hike at the next meeting, amid doubts about the approval of this step a week before the US midterm elections, while quotes of approximately 80% suggested the possibility of a rate hike during the December meeting.
This week remains a turning point in determining the direction of US stocks, as strong results and clear monetary policies may give investors justification to resume buying, while any negative indicators regarding profits or spending may deepen pressures and increase market volatility.
