This week is the one Wall Street has been most anxiously awaiting all year. On the 29th (local time), the earnings releases of Microsoft, Alphabet, Amazon, and Meta coincide with Fed Chair Powell's final FOMC decision all in one day. The following day, the 30th, will see the release of Q1 GDP preliminary data and the March PCE price index. Reuters described this as "a confirmation test of a rally that has come too far too fast."
The S&P 500 has surged 12% since its March 30th low, while the Nasdaq has climbed over 17%, approaching all-time highs as it enters this week. The Magnificent Seven ETF (MAGS) remains down -11% year-to-date, still underperforming. Whether the four companies' earnings will close this gap or widen it further is this week's key question.
Big Four Earnings on 29th — Common Theme: 'AI Capex vs. Revenue Growth'
What the market is most focused on in the four companies' earnings is whether astronomical AI capital expenditures are actually translating into revenue growth.
Alphabet (GOOGL) consensus calls for EPS of $2.64 and revenue of $92.2 billion (+20.6% YoY). Google Cloud's Q4 growth rate was 48%, with Q1 expected to exceed this. Alphabet has guided annual capex at $175-185 billion. Notably, approximately 75% of Google's code is now processed through AI generation followed by engineer review.
Amazon (AMZN) will be watched for AWS growth rates and Trainium chip demand, especially after CEO Andy Jassy described the company's semiconductor business as "on fire." Microsoft (MSFT) will focus on Azure AI demand and Copilot monetization progress. Meta (META) reports immediately after announcing hiring freeze cancellations and departmental headcount reductions, with advertising revenue growth amid efficiency improvements as the key confirmation point.
The Magnificent Seven's 2026 earnings growth consensus stands at 25%, significantly outpacing the 11% for the remaining 493 S&P 500 companies. Actual numbers must emerge to justify this premium.
FOMC on 29th — Powell's Final Meeting
The 29th also marks Fed Chair Powell's final FOMC meeting. Powell's term expires on May 15th. Kevin Warsh, nominated by President Trump as successor, has completed confirmation hearings, but uncertainty remains over the transition timing due to some Republican senators withholding approval.
Rates are overwhelmingly expected to hold at 3.50-3.75%. The market's real interest lies not in the hold decision but in the statement language. Since this is a non-projection meeting without dot plots or Summary of Economic Projections (SEP), every line in the statement carries interpretive weight.
The Fed faces a clear dilemma. Q4 GDP final reading dropped to 0.5%, core PCE remains around 3.1% well above the 2% target, and Iran war-driven oil price shocks are reflecting in energy costs. Growth is slowing while inflation remains uncontrolled. Whether Powell views inflation as temporary or signals rate holds through the second half will determine market direction for the year's remainder.
GDP & PCE on 30th — Iran War's Economic Bill
At 8:30 AM ET on the 30th, Q1 GDP preliminary data and March PCE will be released simultaneously. The Employment Cost Index (ECI) will also be published.
Q1 was when the Strait of Hormuz blockade from the Iran war intensified. Oil prices maintained around $90-100 per barrel, compounded by tariff restructuring. Weak GDP combined with strong PCE would create a stagflationary scenario that extremely narrows the Fed's policy room. March PCE expectations stand at 3.5% annualized, up from the previous 2.8%.
Other Notable Events
Apple (AAPL) also reports earnings on the 30th. This marks the first earnings release since the CEO transition announcement (Tim Cook to John Turnus, scheduled to take office September 1st), likely making this one of Tim Cook's final earnings calls. Eli Lilly (LLY) also reports on the 30th. Visa (V) and Starbucks (SBUX) report on the 28th, while ExxonMobil (XOM) and Chevron (CVX) report on May 1st.
Related Stocks & ETFs
Big Four Earnings: MSFT, GOOGL, AMZN, META
Additional Earnings: AAPL, LLY, V, XOM, CVX, HOOD
Rate-Sensitive Sectors: TLT, IEF, XLF, GLD
ETFs: QQQ, MAGS, XLK, SPY
