Updated 10:57 p.m. Sunday
Every earnings season, there’s a monster week. Not so much in terms of the numbers of companies report quarterly results but WHAT companies are reporting.
And the week ahead is the monster week for earnings with a scoop on top — a Federal Reserve meeting with a probable interest-rate cut.
The big show includes earnings from:
- Microsoft, Google-parent Alphabet and Facebook parent Meta Platforms after Wednesday’s close.
- Apple and Amazon.com after Thursday’s close.
- Oil giants Exxon Mobil and Chevron before Friday’s open.
The first five, with $15.1 trillion of market capitalization, represent 26.5% of the market capitalization of the entire Standard & Poor’s 500 Index, as of Friday, according to Slickcharts.
Add in Nvidia, which doesn’t report earnings until Nov. 19 and Tesla, which reported last week, the tech giants alone represent 37% of the S&P 500’s market cap.
With the five reports on tap, it’s that big of a week. Going into this big of a week, futures trading suggest the major stock indexes will continue to push higher at Monday’s open.
If that’s not enough, of course, there’s the Fed, which is expected to cut its key interest rate, the federal funds rate, to 3.75% to 4% on Wednesday. It’s now at 4% to 4.25%.
And we’re giving short shrift to others reporting next week. These include:
Visa, UnitedHealth Group, Caterpillar, Boeing, Service Now, Starbucks, Royal Caribbean Cruises, D.R. Horton, Eli Lilly, Merck, Coinbase Global, Abbvie and Zillow.
How the week ended
U.S. stocks fared decently last week. The Standard & Poor’s 500 Index was up 1.9% on the week, thanks to record close on Friday. The Nasdaq Composite was up 2.3% for the week. The Dow Jones Industrial Average added 2.2%.
The Russell 2000 small cap index finished 2.5% higher.
Apple added 4.2% on the week. Meta Platforms jumped nearly 3%.
Interest rates came down.
What are the expectations?
Short answer: Strong. We hesitate to say euphorically strong because a company can shock with a bad report that no one saw coming. The stocks of two western U.S. bank s were drubbed recently after disclosing problems in their loan portfolios. Both stocks have recovered.
Increasingly, there’s talk about the stock market being in a bubble like the dot.com bubble of the late 1990s.
Related: Who Wants to be a CEO? Fewer and Fewer People are Interested in the Top Job.
But the charts of the major indexes aren’t showing cracks. Nor are the performances of the 11 S&P 500 sectors suggesting a problem.
All are higher on the year, led by Communications Services (which includes Alphabet and Meta), Technology (led by Nvidia, Microsoft and Apple) and Utilities.
Yes, Utilities stocks may look a little funky as a high-flyer sector. But utilities are absolutely in a sweet spot. They are supposed to put out regular, stable profits, but the value of the stocks is tied directly to bond yields.
The 10-year U.S. Treasury yield was at 4.809% on Jan. 14. It closed Friday at 4.023%. It’s down 12% on the year and 16.3% from the January peak. If rates fall, the value of utility earnings goes up, and so should the stock prices.
Want confirmation? The Dow Jones Utility Average is up 16.7% this year.
Image source: Xinhua via Getty Images
What’s the potential?
There are many on Wall Street who believe fervently in a big upside to the market through December and into 2026. Their fervor is built around four key assumptions:
- Lower tax rates on business thanks to President Trump’s Big Beautiful Tax Bill.
- Lower interest rates. Many members of Federal Reserve Board and the presidents of the 12 Federal Reserve banks see another rate cut in December and more in 2026.
- Less business regulation.
- Massive investment in the infrastructure to support artificial intelligence, what Nvidia CEO Jensen Huang likes to call the new industrial revolution. That alone, the theory goes, means more construction all over the world for data centers and the infrastructure to tie everything together, more expansion of technology development and manufacturing and the like.
We’ll stop for a second to drill into the interest-rate question. As 2025 opened, a 30-year mortgage rate was about 7.05%. On a $250,000 mortgage, that translates into a monthly principal and interest payment of $1,670. (Taxes and insurance are separate.)
The rate is now about 6.2%, which means the payment would drop to about $1,531. That’s a saving of about 8.3%. (Assuming home prices are steady.)
What’s the downside?
The economy has been buffeted by tariffs all year and politics. The government shutdown has gone on for a month.
Many economists and investors believe the tariff uncertainty was a contributing factor in Friday’s Consumer Price Index Report for September showing inflation running at a 3% annual clip.
That rate was good enough for investors large and small to power the Dow, S&P 500, Nasdaq and Nasdaq Composite indexes to new highs on Friday. But 3% is not the Fed’s target rate. It’s still 2%. So, a 3% inflation rate sustained for 10 years, as The Wall Street Journal noted over the weekend, would reduce the value of a dollar to 73.74 cents after 10 years. (And, we’d add, 24 years to cut the value of a dollar in half.)
The tariff negotiations between the Trump Administration and other countries have taken much longer to move to enactment and document signatures. China still hasn’t agreed to terms. Canadian-U.S. trade talks foundered this weekend.
Geopolitical concerns are also a wild card.
Economists believe tariff uncertainty has weighed on the jobs market overall and will affect labor conditions well into 2026. It certainly weighed on stocks in April and even affected the markets this past week.
Challenger, Gray & Christmas, the big outplacement firm, sees the uncertainty affecting jobs. The firm has counted job cuts affecting 946,426 workers in the first nine months of 2025, the biggest jump since 2020. In fact, the company’s count was 24% larger than its count for all of 2024.
So, there’s much to think about. But this week will be a monster with big numbers and lots of drama and excitement and hope there aren’t too many nasty surprises.
Enjoy.
