Fed Rate Decision and Tech Earnings Set to Shake US Stock Market

The US stock market is preparing for a challenging week ahead of the Federal Reserve's interest rate decision and a packed earnings season led by tech giants and artificial intelligence (AI) companies.

Major equity indexes are on track to post weekly declines, with Alphabet and Tesla shares plummeting after their quarterly reports. The decline in these AI-related stocks has set a negative tone for the sector, which has been a key driver of market gains this year.

The Fed meeting is expected to provide clues about future interest rate hikes, with investors worried that policymakers may need to be more aggressive in raising rates due to rising inflation and oil prices. Brent crude hit $100 a barrel on Thursday, fueling fears of higher borrowing costs and slower economic growth.

Despite the uncertainty, Fed fund futures are pricing in a 36% chance of a quarter-percentage-point rate increase this week. The central bank's new chair, Kevin Warsh, has vowed to bring inflation down to target without providing clear guidance on future rate hikes.