U.S. corporate earnings season is picking up steam in the days ahead, with reports from Alphabet and Intel poised to shape investor sentiment around the booming artificial intelligence trade — all while markets navigate uncertainty tied to the ongoing U.S.-Israeli war with Iran.
As of Thursday, the S&P 500 was slightly lower for the week but remained close to record territory, having climbed 10% so far in 2026 on the back of a bull run now approaching four years in length.
Rising expectations for corporate profits this year have given investors confidence to stay bullish on stocks. The second-quarter earnings season, now just getting underway, is expected to confirm that momentum, with S&P 500 earnings projected to surge 25.7% during the period, according to LSEG IBES data.
Michael Arone, chief investment strategist at State Street Investment Management, explained why markets keep climbing despite troubling news cycles. “Headlines continue to raise anxiety and leave investors scratching their heads wondering why the market continues to reach new heights,” he said. “And the reason it does is because the fundamentals have been resilient, and the earnings continue to be outstanding.”
Alphabet’s quarterly results, due Wednesday, are expected to be one of the most closely watched reports of the season. The parent company of Google ranks as the third-largest U.S. company by market value at $4.3 trillion, and as one of the so-called “Magnificent Seven” heavyweight stocks, its performance can move major market indexes.
Alphabet is also considered an AI “hyperscaler” — a company pouring billions of dollars into data centers and AI infrastructure. That kind of capital spending has been central to this year’s market rally, fueling massive gains for semiconductor companies and others benefiting from the AI buildout.
Kevin Mahn, president and chief investment officer at Hennion & Walsh Asset Management, warned that any sign of reduced AI spending could have wide consequences. “If Alphabet announces any type of pullbacks with respect to the spending that they’re forecasting around AI, you could see ripple effects across the entire AI ecosystem,” he said.
Chip company earnings from Intel and Texas Instruments are also drawing significant attention after a remarkable run in semiconductor stocks. Despite some stumbling in recent weeks, the Philadelphia SE Semiconductor index is still up roughly 68% in 2026. Intel shares have more than doubled, soaring over 160%, while Texas Instruments has gained 68%.
Recent earnings from Samsung Electronics and Taiwan Semiconductor drew muted market reactions despite strong results, underscoring just how high the bar has been set for the chip industry. Arone noted that leveraged investment products tied to semiconductors are “amplifying on both the upside and the downside,” contributing to the sector’s sharp swings.
Beyond the AI-focused names, Tesla — another member of the Magnificent Seven — is also scheduled to report results in the coming week. Additional high-profile reports are expected from American Express, Philip Morris International, and defense contractor RTX, with more than 80 S&P 500 companies set to release results.
Major U.S. banks already kicked off the season this week, posting earnings boosted by merger and acquisition advisory fees and a surge in trading revenue.
Markets remain on edge over Middle East developments following a recent escalation of the nearly five-month-old U.S.-Israeli war with Iran. While many investors believe the conflict will be relatively brief, concerns persist that renewed flare-ups could push energy prices back to the elevated levels seen when the war began — potentially stoking inflation fears.
That concern takes on added weight ahead of the Federal Reserve’s meeting scheduled for the end of July. Futures markets suggest traders expect the central bank to raise interest rates in the coming months to combat inflation that currently sits above the Fed’s 2% annual target.
Some of those worries eased this week after consumer and producer price data came in cooler than expected, reducing the likelihood of a rate hike at this month’s meeting.
Eric Kuby, chief investment officer at North Star Investment Management, offered a measured take on the economic picture. “The macro data has painted a picture of a steady economy with some improvement in inflationary pressure,” he said.
