The Stock Market Faces Make-or-Break Tests: The Fed's Interest-Rate Decision and Earnings From Alphabet, Amazon, Apple, Meta, and Microsoft

Market Overview - The S&P 500 has been in a bull market for three years, gaining 17% in 2025, but its momentum may stall depending on upcoming events [1] - The index is currently trading at 22.7 times forward earnings, a significant premium compared to the 10-year average of 18.6 times [12] Federal Reserve Interest Rate Decision - The Federal Reserve will announce its interest-rate decision on October 29, following a two-day meeting [2] - In September, the Fed cut its benchmark interest rate by 0.25 percentage points, the first cut since December 2024, as policymakers awaited clarity on the impact of trade policies [5] - Investors expect another quarter-point cut in October, followed by a similar cut in December, with potential market volatility if the Fed deviates from this path [8] Earnings Reports from Major Tech Companies - Major tech companies, including Alphabet, Meta Platforms, Microsoft, Amazon, and Apple, will report their financial results between October 29 and October 30 [3][13] - Collectively, these companies account for 25% of the S&P 500 by weight, making their earnings reports critical for market movement [9] Expected Earnings - Alphabet: Revenue expected to increase 6% to $93.9 billion; earnings expected to rise 7% to $2.27 per diluted share [9] - Meta Platforms: Revenue expected to increase 22% to $49.4 billion; earnings expected to rise 11% to $6.68 per diluted share [9] - Microsoft: Revenue expected to increase 15% to $75.2 billion; earnings expected to rise 11% to $3.66 per diluted share [13] - Amazon: Revenue expected to increase 12% to $177.8 billion; earnings expected to rise 10% to $1.58 per diluted share [13] - Apple: Revenue expected to increase 7% to $101.8 billion; earnings expected to rise 7% to $1.76 per diluted share [13] Economic Impact of AI Investments - Commentary regarding artificial intelligence (AI) investments will be crucial, as capital spending related to AI was a significant source of economic growth in the first half of 2025 [10] - Any indication of conservative investment or lack of benefits from past AI infrastructure investments could raise concerns about economic strength and negatively impact the stock market [11]