Earnings flood, Fed meeting will test rickety AI market rally

US stock investors are bracing for a critical week, with key corporate earnings reports from major AI companies and a Federal Reserve meeting looming. The Nasdaq Composite saw a minor decline as technology shares faltered, casting doubt on the AI-driven market rally that has powered the US equity bull market since its fourth anniversary.

Meta and Lam Research, both hyperscalers heavily invested in AI, reported weak quarterly results, leading investors to question the sustainability of the tech spending spree. The Federal Reserve's interest rate policy meeting on Wednesday could further destabilize markets, as investors grapple with mounting financing costs and the impact of the AI buildout on corporate bottom lines.

Analysts warn that the next few weeks could bring heightened volatility, with earnings from Alphabet, Microsoft, Amazon, and other S&P 500 giants expected to determine whether the recent tech pullback is a temporary setback or the start of a deeper correction.