Fed, big earnings week loom for markets as global tensions muddy outlook

Market Overview - U.S. stocks experienced volatility due to geopolitical tensions, particularly related to President Trump's stance on acquiring Greenland, which raised concerns about a potential trade war with Europe [1][2] - Major equity indexes rebounded after Trump eased tariff threats, indicating a possible resolution regarding Greenland [2][3] Earnings Reports and Corporate Profits - The upcoming week is expected to shift focus towards U.S. corporate profits, with earnings anticipated to rise significantly, driven by a broader range of companies [3][6] - Approximately 20% of the S&P 500 companies are set to report quarterly results, including major players like Apple, Microsoft, Meta Platforms, and Tesla [4] - The S&P 500 index has seen a 1% increase at the start of 2026, following three consecutive years of double-digit returns, with current valuations exceeding 22 times expected earnings, above the long-term average of 15.9 [5] AI Investment Insights - A key theme this earnings season is whether companies are beginning to see returns from investments in artificial intelligence, following skepticism about the profitability of substantial spending on data centers and infrastructure [6][7] - As of Thursday, 81% of the 59 companies that reported earnings exceeded analysts' expectations, with S&P 500 earnings projected to have increased by 9.1% in Q4 of the previous year and expected to rise over 15% in 2026 [6]