Wall Street on High Alert as Fed Decision Looms Amid Tech Earnings Deluge

The US stock market is bracing for a Federal Reserve meeting and a flood of corporate earnings reports, both of which could impact investor sentiment. The S&P 500 has fallen over the past week due in part to losses from Alphabet and Tesla after their quarterly reports.

Alphabet's massive AI spending plans sparked concerns about the sustainability of tech stocks that have driven market gains this year. Despite a decline, the S&P 500 remains up 8% in 2026, but investors are becoming increasingly cautious. 'Investors are walking on eggshells,' said Kristina Hooper, chief market strategist at Man Group.

The Fed meeting comes as oil prices have surged to $100 per barrel due to rising tensions in the Middle East, raising fears of inflation and potentially more aggressive interest rate hikes. The central bank is expected to hold rates steady, but futures markets suggest a 38% chance of a quarter-point increase by January 2027.

Investors will be closely watching the policy statement and press conference for hints about future rate decisions. Higher rates can slow economic growth and weigh on stocks. A report next week is also expected to show US GDP growth in the second quarter, as well as inflation and consumer sentiment data.