Week ahead: Big Tech earnings, Fed decision, and an oil crisis set up Wall Street's biggest test of the year

• The five Magnificent 7 stocks reporting this week have already climbed over 10% in April, raising concerns about whether revenues can justify elevated AI spending and capital expenditure levels
• Apple's earnings call is expected to be 'monumental' as investors assess the company's AI strategy under incoming CEO John Ternus, who replaces departing Tim Cook in September
• Brent crude oil climbed above $107 per barrel due to Iran's Strait of Hormuz blockade entering its third week, with Goldman Sachs raising its Q4 oil price target to $90 per barrel

Market Summary: Critical Week Ahead for Wall Street

Key Events Converging:

Wall Street faces a pivotal week combining major tech earnings, a Federal Reserve decision, and an ongoing Middle East oil crisis. Approximately 180 S&P 500 companies report earnings, including five "Magnificent 7" tech giants.

Major Earnings Schedule:

• Wednesday after-hours: Microsoft, Meta Platforms, Amazon, and Alphabet
• Thursday: Apple (expected revenues: $109.45 billion)
• Other notable reporters: Visa, Coca-Cola, Starbucks (Tuesday); AbbVie, Qualcomm, Ford (Wednesday); Eli Lilly, Merck, Mastercard (Thursday); Exxon Mobil, Chevron (Friday)

Tech Sector Outlook:

The five Magnificent 7 stocks reporting have already surged over 10% this month. Wedbush anticipates strong results driven by cloud growth, AI monetization, and capital expenditure programs. However, XTB's Kathleen Brooks warns companies must justify AI spending levels with corresponding revenue growth.

Apple Leadership Transition:

Beyond financials, investors will scrutinize Apple's conference call following CEO Tim Cook's departure announcement, with John Ternus assuming leadership in September. Focus centers on the company's AI strategy under new management.

Federal Reserve Meeting:

Wednesday's Fed decision is expected to hold rates steady but carries significance as likely Jerome Powell's final meeting as chair. Kevin Warsh's anticipated confirmation as successor reduces leadership uncertainty. A potentially more dovish Fed could emerge if President Trump gains additional FOMC appointments.

Geopolitical Risk:

The Iran-Strait of Hormuz blockade enters its third week. Brent crude reached $107/barrel before moderating on reports of potential resolution. Goldman Sachs raised its Q4 oil price target to $90/barrel.

Market Position:

S&P 500 and Nasdaq closed at record highs Friday, setting up a crucial test of market resilience.