October 29, 2025: The Big Earnings Week Is Here

The U.S. Q3 earnings season has begun on a constructive note, easing the proverbial wall of worry that had formed around tariffs, geopolitics, and inflation. Results reported so far indicate that earnings growth is largely keeping pace with last quarter, dispelling some of the conservatism embedded in earlier estimates. Better margins, resilient consumer spending, and sustained enthusiasm surrounding artificial intelligence (AI) continue to bolster investor sentiment. While early signs of improvement are emerging across several non-technology sectors, the market will still look to the technology mega caps to deliver meaningful performance to justify elevated valuations.

This week will be pivotal, with five major mega-cap companies—Alphabet, Apple, Meta, Microsoft, and Amazon—set to report. Investors will be focused on whether these firms can demonstrate tangible returns on their substantial AI investments. Strong recent momentum and premium valuations suggest the market is leaning optimistic heading into the results, but that also means the margin for error is narrow. Delivering convincing financial performance and credible AI monetization pathways will be key to sustaining sentiment.

The bar is not high in terms of earnings expectations. Prior quarter growth far outpaced what is expected of them in the Q3 report. However, a mere earnings and sales beat may not suffice. Market participants will read the tea leaves through management commentary on forward guidance, monetization of AI spending, and strategies to beat disruptive and fast-emerging competition. Paring continued strong execution with a credible roadmap for sustained value creation will be key to maintaining investor confidence.

Weekly Market Update: October 29, 2025