US stock investors are preparing for an important week as major technology companies report their quarterly earnings and the Federal Reserve announces its interest rate decision on Wednesday. Both events could test the strength of the recent US stock market rally.

Investors have become more worried about the artificial intelligence (AI) boom after technology stocks fell sharply last week. The AI boom has been one of the biggest drivers of the US stock market's rise over the past four years, Reuters reported.

The Nasdaq Composite, which tracks many major technology companies, ended Friday with a small loss. This came a day after the index recorded its biggest single-day fall since June. Investors were disappointed with the latest quarterly results from Meta Platforms and semiconductor equipment maker Lam Research.

Meta is among the major technology companies spending heavily on building data centres to support AI services. Lam Research is a semiconductor industry company whose shares have benefited from the AI boom. The disappointing results from both companies have raised fresh concerns about whether investors will continue to support expensive AI projects, Reuters reported.

Three other major technology companies — Alphabet, Microsoft and Amazon — are scheduled to report their quarterly results next week. Their earnings will be closely watched as investors look for signs that heavy spending on AI is generating enough business growth and profits.

Around one-third of the companies in the S&P 500 index are expected to report their quarterly results during the week. The Federal Reserve's interest rate decision on Wednesday will be another major event that could influence stock prices.

Trump faces voter backlash as US prices rise 5.4% and gas prices climbNick Giorgi, chief equity strategist at Alpine Macro, said investors have several important developments to watch at the same time.

He said the market is now looking more carefully at how much technology companies are spending on AI and whether that spending makes financial sense, according to Reuters. Giorgi said investors are no longer automatically supporting companies that spend large amounts of money on AI infrastructure. He described this as a healthy development for the market, although it could cause more short-term losses for technology stocks, Reuters reported.

Investors are also watching the US midterm elections scheduled for November 3. Growing expectations that Democrats could take control of Congress from President Donald Trump's Republican Party have added another source of uncertainty for financial markets, according to Reuters.

These developments could lead to bigger swings in stock prices over the next two weeks. Despite the recent weakness in technology shares, the S&P 500 has gained 11% in 2026 so far, showing how strongly the broader market has performed this year. Big Tech earnings to decide the next move for stocksStrong corporate profit growth has helped support the US stock market this year, even as investors face higher US Treasury yields and rising energy costs linked to the conflict in the Middle East. Treasury yields influence borrowing costs across the economy, while higher energy prices can increase expenses for businesses and households.

Third-quarter earnings for S&P 500 companies are currently expected to rise by more than 32% from the same period last year. This estimate is based on LSEG IBES data, with more than 100 companies having reported their results so far. The coming week is expected to be the busiest part of the earnings season.

King Lip, chief strategist at BakerAvenue Wealth Management, said the next round of corporate earnings could help investors decide whether the recent fall in technology stocks is a buying opportunity or the beginning of a deeper market correction.

He said investors need another round of strong earnings to regain confidence, according to Reuters. Alphabet and Microsoft will announce their quarterly results on Wednesday, while Amazon is scheduled to report on Thursday. Investors will pay close attention to what these companies say about their future spending on AI and whether their investments are producing enough returns.

Trump announces Audi's $4 billion Georgia SUV plant, set to create 4,500 jobsThe three companies are among the major technology businesses known as hyperscalers. These companies operate large cloud computing and data centre networks that support AI tools and other online services. Their investment plans are important because the money they spend creates business for many other companies involved in building AI infrastructure, according to Reuters.

Spending by hyperscalers is expected to reach around $800 billion in 2026. This includes major investments in data centres and the infrastructure needed to run AI services. Such spending supports a wide range of businesses, but investors are increasingly worried about whether it can continue at the same pace as financing costs rise.

Kevin Mahn, president and chief investment officer at Hennion & Walsh Asset Management, said corporate earnings are important for maintaining confidence in the AI boom. Investors want to understand how long major technology companies will continue spending heavily on AI and whether those investments can deliver lasting business growth, according to Reuters. Fed interest rate decision in focusQuarterly results from chipmakers Intel and Sandisk will also be watched closely next week. Their performance could influence investor confidence in the AI trade because semiconductor companies supply products used in AI-related computing and data centres.

Other major companies due to report earnings include drugmaker Eli Lilly, oil companies Exxon and Chevron, and industrial equipment maker Caterpillar.

Their results will give investors a broader picture of business conditions across different parts of the US economy, according to Reuters. The Federal Reserve's interest rate decision on Wednesday will be another major test for the stock market. The central bank raised interest rates in September for the first time since 2023 as it tried to bring inflation under control. Its next decision will help investors understand whether further rate increases are likely. Investors were not expecting another rate increase in October. Data from LSEG showed that federal funds futures were indicating a probability of less than 10% that the Fed would raise rates again at its Wednesday meeting, according to Reuters.

One reason investors are doubtful about an October rate increase is that the US midterm elections are only about a week away. However, this is an investor consideration rather than a confirmed reason for the Fed's decision. Markets are more strongly expecting another rate increase in December. Federal funds futures were indicating roughly an 80% probability of a rate hike at the Fed's next meeting that month, according to LSEG data cited by Reuters. Walter Todd, chief investment officer at Greenwood Capital, said he would closely watch the press conference held by Fed Chair Kevin Warsh after the interest rate decision.

Investors will look for clues about the central bank's next move, particularly whether it plans to raise rates in December, Reuters reported. Todd said the market already expects a rate increase in December, making the Fed chair's comments especially important. Any indication that the central bank may change its plans could affect investor expectations and stock prices in the coming weeks. Overall, Wall Street faces three major tests: earnings from leading technology companies, the Federal Reserve's interest rate decision and uncertainty ahead of the US midterm elections.

Strong earnings and clear guidance on AI spending could help support the stock market rally, while disappointing results or signals of higher interest rates could put further pressure on stocks.