Investors on edge as Apple, Amazon, Microsoft, Meta report Q2 in Fed week

Dubai: Global markets are entering a crucial week, with investor attention locked on a wave of earnings from US technology giants and a closely watched policy decision from the US Federal Reserve.

US stocks ended Friday at record highs, lifted by expectations that upbeat results from Apple, Amazon, Microsoft, and Meta could justify lofty valuations and extend this year’s rally. The four are part of the “Magnificent Seven” group of mega-cap stocks that have been central to Wall Street’s gains in 2024.

“Mag 7 earnings could make or break this rally,” said Neil Wilson of Saxo Bank, pointing to how heavily investor sentiment now hinges on a few dominant tech names.

Apple Inc. is expected to post its first year-on-year increase in Greater China revenue in two years, helped by aggressive promotions and resilient services income.

Analysts at Citi forecast an eighth consecutive quarter of double-digit growth for Apple’s services segment, despite regulatory pressure in the EU. However, delays in AI-related offerings and US-China trade tensions could weigh on iPhone sales through the second half of the year.

Amazon.com and Microsoft Corp. are also expected to shed light on how companies are balancing rising AI investment costs with weaker consumer sentiment and the lingering impact of tariffs. Meta Platforms, meanwhile, may face questions over its high compensation packages for AI talent amid signs of slowing ad spending from key Chinese clients.

In Europe, equities trimmed early losses on Friday, with luxury and automotive shares rebounding on optimism around trade negotiations. Asian markets, however, snapped their longest winning streak since January, as doubts emerged over the timing of the next US interest rate cut.

This week, markets will be especially sensitive to the Fed’s decision on Wednesday. While no change in interest rates is expected, any hint of a potential rate cut in September could rattle or revive market sentiment.

For investors, the combination of earnings and policy updates means volatility is likely. A strong showing by Big Tech and a dovish Fed tone could reinforce the market’s bullish momentum — but any surprises might bring sharp reversals.