Most weeks in markets there’s one thing to focus on. This week there are about seven happening simultaneously.
Five of the Magnificent Seven report earnings. The Federal Reserve makes its interest rate decision. Oil is creeping back toward $100. And Iran peace talks stalled again over the weekend. If you’ve been following markets loosely, this is the week to pay close attention.
Here’s everything happening and why it matters.
The Magnificent Seven Earnings
Meta reports today after market close. Microsoft and Alphabet report tomorrow. Apple and Amazon report Thursday. That’s five of the seven most valuable companies on earth reporting earnings in four days.
To put the stakes in context -these five companies alone account for roughly 25% of the entire S&P 500 by market weight. When they move, the index moves. When they disappoint, the whole market feels it.
So far this earnings season the numbers have been strong. 84% of S&P 500 companies that have reported beat expectations. Annual earnings growth is now tracking at 15.1%, up from 13.1% just a week ago. The bar has been set high and the market has been climbing on the back of it.
The key thing to watch in each earnings call isn’t just the revenue and profit numbers. It’s the AI spending guidance. We covered this with Tesla last week; the stock beat earnings then dropped because Musk announced $25 billion in spending on robots and AI. The same dynamic applies to every Magnificent Seven company this week.
Markets want strong profits. But they’re also nervous about runaway AI spending eating into margins. Goldman Sachs analysts specifically flagged that disappointing capex guidance from the Magnificent Seven is the single biggest downside risk to markets this week.
Watch what each CEO says about AI investment plans. That’s the number that will move stocks more than the headline profit figure.
The Federal Reserve. Powell’s Second to Last Meeting
On Wednesday the Federal Reserve announces its interest rate decision. Nobody expects a change — rates will almost certainly stay at 3.50 to 3.75%. But that’s not the story.
The story is what Jerome Powell says in his press conference afterward.
This is Powell’s second to last meeting as Fed chair before Kevin Warsh takes over in May. Two months into an active war, with oil above $99, inflation at 3.3%, and five of the world’s biggest companies reporting earnings in the same week. What Powell says about the path ahead will be closely scrutinised.
Specifically, markets want to know two things. First, does the Fed still think one rate cut is possible in 2026? Or has the war and the oil shock pushed that timeline back further? Second, how worried is the Fed about recession? Ken Griffin’s warning from last week is still sitting in the background. If the Strait stays closed, recession becomes unavoidable. Does Powell acknowledge that risk or play it down?
His words on Wednesday will move markets more than the rate decision itself. Listen carefully.
Oil Is Climbing Again
Over the weekend Trump scrapped plans to send Witkoff and Kushner to Pakistan for a new round of ceasefire talks, saying negotiations could happen by phone instead. Iran offered a new proposal to reopen the Strait but suggested nuclear talks be deferred. The US hasn’t formally responded.
The result? Oil is back above $99 this morning. Goldman Sachs raised its oil price forecast over the weekend, now expecting Brent to average $90 per barrel in Q4 2026, up from their previous forecast of $80.
Jet fuel prices are on average 105% higher than last year as oil has surged above $100 per barrel. Major airlines like United, American and Delta have been cutting flights as their fuel costs surge. That feeds directly into next month’s inflation reading and keeps the Fed boxed in.
The two month mark of the war arrives this week. The longer the Strait stays closed or restricted, the closer Griffin’s recession clock gets to running out.
What to Actually Watch Day by Day
Today – Meta earnings after market close. Watch their AI spending guidance and whether Zuckerberg gives any update on Llama and their AI infrastructure plans. Also watch oil – if it breaks back above $100 today, that’s a signal the market is pricing in more war, not less.
Tomorrow – Microsoft and Alphabet. Two of the most important AI companies on earth reporting on the same day. Microsoft’s Azure cloud growth and Alphabet’s advertising revenue are the two numbers that matter most. Bank of Japan also meets tomorrow, any surprise from them could ripple through global markets.
Wednesday – Federal Reserve decision and Powell press conference. This is the centrepiece of the week. Set an alarm for the press conference. Whatever Powell says about oil, inflation, and the timing of rate cuts will dominate market conversation for the rest of the week.
Thursday – Apple and Amazon. Apple is the most valuable company in the world and the first earnings report under the final weeks of Tim Cook’s tenure. Amazon’s AWS cloud division is their most important business right now. Both will be closely watched. European Central Bank also meets Thursday.
The Bigger Picture
Here’s what makes this week genuinely unusual. Normally earnings season and a Fed meeting in the same week would be enough to move markets significantly. Add an active war with oil at $99, a stalled peace process, and the transition of the most powerful central bank in the world to a new chair and you have a week where the outcome is genuinely difficult to predict in either direction.
The bull case is that the Magnificent Seven deliver strong numbers, Powell signals patience rather than panic, and Iran’s new proposal gets traction. Markets push to new all-time highs.
The bear case is that AI spending guidance disappoints, Powell sounds more hawkish than expected, and oil breaks back above $100 for good. The rally that’s been running since the ceasefire announcement starts to crack.
Both are entirely possible this week. Which is exactly why it’s worth paying attention.
