Stock market week ahead: Big Tech earnings and the Fed share the stage

The stock market week ahead puts two market drivers on the same calendar: megacap tech earnings and the Federal Reserve’s July rate decision. For everyday investors, that means fresh signals on whether artificial intelligence spending is still supporting growth, and whether inflation pressure from higher oil prices is changing the rate outlook.

CNBC’s Investing Club identified Amazon, Meta Platforms, Microsoft and Apple as the headliners in what it called the busiest week of the summer earnings season. The week also includes reports from Boeing, Corning, Procter & Gamble, Starbucks, Linde and Eaton, giving investors a cross-section of demand in aerospace, consumer staples, restaurants, industrial gases and electrical equipment.

What should investors watch in the stock market this week?

The biggest single theme is AI capital spending, often shortened to capex, which means money companies spend on long-term assets such as data centers, chips and power systems. Investors will be listening for whether that spending is translating into revenue growth, especially at cloud providers that rent computing power to businesses.

Meta reports Wednesday night, with Wall Street focused on its AI spending plans and how new computing capacity may support advertising, internal productivity or a possible future cloud business, according to CNBC’s Investing Club. LSEG estimates cited by the club call for Meta revenue of $60.17 billion and earnings per share of $7.22. Earnings per share, or EPS, is profit divided by the number of shares outstanding.

Microsoft also reports Wednesday night. The key metric beyond sales and profit is Azure growth, because Azure is Microsoft’s cloud platform and a major channel for AI demand. LSEG estimates cited by CNBC’s Investing Club call for revenue of $87.63 billion and EPS of $4.24.

Amazon reports Thursday night, with investors expected to compare Amazon Web Services growth against Azure and Google Cloud. CNBC’s Investing Club said Amazon’s retail business also had a Prime Day selling event during the quarter. LSEG estimates cited by the club put Amazon revenue at $196.4 billion and EPS at $1.82.

Apple reports Thursday night near the end of the iPhone 17 cycle. CNBC’s Investing Club said investors are likely to pay closer attention to Services and gross margin after the company raised Mac and iPad prices because of higher memory costs. LSEG estimates cited by the club call for revenue of $108.6 billion and EPS of $1.89. The club also said this will be Tim Cook’s final earnings call as CEO before he becomes executive chairman in September.

The Fed decision and inflation data

The Federal Reserve announces its July interest-rate decision Wednesday at 2 p.m. ET, followed by Chair Kevin Warsh’s press conference at 2:30 p.m. ET. CNBC’s Investing Club said the meeting has drawn more attention after oil prices rose amid renewed Middle East tensions, adding pressure to inflation.

Market probabilities compiled by the CME FedWatch tool showed a one-third chance of a quarter-point rate increase on Wednesday and a 95% chance of an increase by September, according to CNBC’s Investing Club. A rate hike usually raises borrowing costs across the economy, which can affect stock valuations because future profits are discounted at a higher rate.

Thursday brings the June personal consumption expenditures price index, or PCE, which is the Fed’s preferred inflation gauge. Economists polled by FactSet expect PCE to fall 0.07% from May and rise 3.7% from a year earlier, while core PCE, excluding food and energy, is expected to rise 0.2% monthly and 3.3% annually.

Bank of America economists told clients Tuesday that underlying inflation trends remain well above the Fed’s 2% target, even after excluding temporary factors, according to CNBC’s Investing Club. Thursday also includes the first reading of second-quarter U.S. gross domestic product, giving investors another broad check on the economy.

Other earnings on the calendar

Boeing reports Tuesday morning, with free cash flow and 2026 plane-delivery guidance in focus. Corning also reports Tuesday, with investors watching data-center infrastructure demand and the timing of a shift from copper wiring to fiber optics.

Procter & Gamble reports Wednesday morning after its CFO said at an early June conference that U.S. consumer trends had softened, according to CNBC’s Investing Club. Starbucks reports Wednesday night, with same-store sales and adjusted operating margin in focus. Linde and Eaton report Friday, with Linde tied to industrial activity and Eaton tied to demand for electrical equipment used in AI data centers.

This story draws on original reporting from CNBC.