Earnings season is set to take center stage next week, with several leading tech companies poised to report their financial results. Among those, four notable members of the “Magnificent Seven”—Meta Platforms, Microsoft, Tesla, and Apple—are anticipated to release their earnings during this period. While these giants typically dominate headlines, their recent performance has been less than stellar, casting a shadow over investor expectations.
As 2026 unfolds, many tech titans face tough scrutiny, having fallen well below their 52-week highs. For instance, Meta Platforms and Microsoft are both down more than 17% and 16%, respectively, while Apple has dropped by 14%. Tesla follows closely, sitting nearly 10% off its peak. Market observers note that this underperformance might actually create a favorable setting for these megacaps, as lowered expectations could make it easier for them to deliver positive surprises—not just in terms of this past quarter’s results but also in their forward-looking guidance.
Ken Mahoney, CEO of Mahoney Asset Management, asserts that with the bar set low, there’s a solid chance some of these major stocks will perform better than anticipated. Mahoney has begun to accumulate shares in both Apple and Microsoft, viewing them as undervalued, though he plans to wait for a potentially larger pullback before significantly increasing his stake.
Apple, in particular, is spotlighted as a company to watch in the upcoming week. Investment Chief Michael Landsberg from Landsberg Bennett Private Wealth emphasizes that Apple is currently the only standout among the Magnificent Seven showing meaningful earnings growth, driven largely by a favorable cycle surrounding its iPhone 17 model. This momentum could help lift the stock after experiencing eight consecutive weeks of decline.
On a broader scale, companies within the S&P 500 are projected to deliver an overall blended earnings growth rate of 8% in the fourth quarter, significantly buoyed by the strong performance expected from tech stocks, with a notable anticipated growth rate of 26% for the sector according to FactSet. This could inject more vigor into a stock market that has already begun to trend positively.
Interestingly, while large-cap stocks often grab the headlines, small-cap stocks have led the market thus far in 2026. The Russell 2000 index has set new records with a rally exceeding 7%, compared to a modest 1% gain for the S&P 500. A majority of S&P 500 stocks are outperforming the index itself, with 65% currently beating expectations, marking the second-best performance in nearly 50 years. The equal-weighted S&P 500 index, which gives all stocks equal significance, has also seen a robust increase, primarily fueled by energy and materials sectors.
As all eyes turn to the largest companies in the sector, their contributions could significantly influence the overall performance of the S&P 500. These magnum companies account for over a third of the S&P, with Apple alone representing about 7% of the total market capitalization.
Compounding the financial landscape, the Federal Reserve is also drawing attention, with its first policy meeting of the year scheduled for next week. Analysts broadly anticipate the Fed will maintain its current benchmark interest rates, sitting between 3.50% and 3.75%. However, market participants will closely scrutinize remarks from Fed Chair Jerome Powell for insights into the central bank’s policy considerations, particularly amidst rising questions regarding the Fed’s independence and potential political influences.
The forthcoming week promises a packed schedule for economic indicators and earnings reports. Notably, durable goods, consumer confidence, and the Fed’s decisions will be on the radar, alongside a slew of corporate earnings throughout the week. The results from the Magnificent Seven and insights from the Federal Reserve could play pivotal roles in shaping market trends and responses in the days ahead.
