Key Event of the Quarter for the Stock Market is Here

Key Points

• Alphabet, Amazon, Meta Platforms, and Microsoft, which account for approximately 18% of the S&P 500, will report their quarterly earnings after the market closes today.

• These four AI hyperscalers reported capital expenditures of about $414 billion last year, a 70% increase from 2021, and are projected to rise to $700 billion this year.

• Federal Reserve Chair Jerome Powell will address the economy in a press conference following the central bank’s interest rate decision, expected around 2:00 PM ET today.

The earnings reports from Alphabet, Amazon, Meta Platforms, and Microsoft today are highly anticipated as they could significantly influence the S&P 500 index. Alphabet’s revenue is expected to increase by 19% to $117.2 billion, while Amazon’s is projected to grow by 21% to $188.9 billion. Meta is forecasted to see sales rise by 31% to $55.5 billion, and Microsoft’s sales are forecasted to increase by 16% to $81.3 billion. These companies have heavily invested in AI solutions, and investor focus will be on how these investments impact profitability moving forward.

Additionally, the Federal Reserve’s announcement on interest rates, expected at 2:00 PM ET, could impact market movements. Given that inflation has recently risen, there is little expectation for a rate cut, and any indication of a potential rate increase could lead to a sharp decline in stock market indices.