NEW YORK, April 26, 2026, 13:04 (EDT)
This week could be a turning point for Wall Street’s record run. Heavyweights Microsoft, Alphabet, Amazon, Meta Platforms, and Apple are all set to release results, just as the Federal Reserve prepares to meet and new data on U.S. growth and inflation lands. In a new wrinkle, Senator Thom Tillis on Sunday said he’s prepared to move ahead with Kevin Warsh’s nomination to replace Jerome Powell as Fed chair.
The stakes feel sharper now, with so much optimism already baked in. On Friday, the S&P 500 and Nasdaq both notched record closes; weekly gains landed at 0.55% for the S&P 500 and 1.5% for the Nasdaq. The Dow, though, slipped 0.44%. That leaves little margin for error if earnings outlooks or inflation numbers disappoint.
This week arrives as the rally faces a tug-of-war between bets on artificial intelligence spending and expectations that fallout from the Iran conflict will be limited. “Big week for confirmation of the rally,” said Anthony Saglimbene, chief market strategist at Ameriprise, according to Reuters. Reuters
Over a third of S&P 500 firms are set to deliver earnings. Wednesday brings reports from Microsoft, Alphabet, Amazon and Meta, with Wall Street zeroed in on AI capital expenditures—spending across data centers, chips and computing power. Apple follows on Thursday, just after revealing a new CEO.
First-quarter earnings are off to a fast start: 81.3% of S&P 500 firms that have reported so far have cleared analysts’ forecasts, and LSEG data cited by Reuters puts expected overall profit growth at 16.1%. For the mega-caps, though, decent results alone won’t cut it—they’ll need to show all that AI spending is actually delivering.
Chip stocks are carrying momentum into the week. The Philadelphia SE Semiconductor Index notched its 18th consecutive gain on Friday. Intel jumped, lifted by a better-than-expected revenue forecast; AMD, Arm, and Nvidia moved higher too. “The AI build-out race is still on,” noted Angelo Kourkafas, senior global investment strategist at Edward Jones. Reuters
The Federal Open Market Committee gathers for its two-day policy meeting starting Tuesday, with a decision scheduled for 2 p.m. Wednesday and Chair Powell speaking half an hour later. This could be Powell’s final meeting at the helm, injecting a rare dose of political uncertainty into what’s typically a routine policy stretch.
With Tillis signaling on Sunday that he’s “prepared to move on” with Warsh’s confirmation, one cloud over the Fed succession lifted. The Justice Department’s decision to drop its criminal probe into Powell — something Tillis had flagged as a threat to central bank independence — cleared the way. Reuters
Inflation isn’t taking a back seat. On Thursday at 8:30 a.m., the Bureau of Economic Analysis will post March personal income and outlays, with the Personal Consumption Expenditures price index in focus—this is the Fed’s go-to inflation measure, reflecting what consumers actually spend on goods and services. Also coming Thursday: the first-quarter GDP advance estimate.
Households and businesses are already getting hit by rising prices. The University of Michigan’s consumer sentiment index dropped to a record low of 49.8 in April. Year-ahead inflation expectations? Up to 4.7%, climbing from 3.8% in March. Heather Long, chief economist at Navy Federal Credit Union, said that “more pain will come” if higher transport costs keep pushing up the price of consumer goods. Reuters
There’s still room for a softer landing. Should mega-cap tech deliver solid earnings, AI spending projections remain upbeat, and Powell steers clear of ramped-up anti-inflation talk, the rally might notch another win. Stocks, though, are pressing all-time highs, inflation tied to oil is lingering, and the Fed’s leadership is shifting. A stumble from one of the heavyweights could ripple through quickly.
