A crash in the American stock market

The US stock market is facing a very critical week due to the Federal Reserve's upcoming policy meeting on interest rates and the release of earnings reports from major technology and artificial intelligence (AI) companies. Following the release of quarterly reports from Alphabet and Tesla, a significant drop was observed in major stock indices last week due to the sharp decline in their stocks.

Especially due to the revelation of information regarding Alphabet's massive artificial intelligence investment plans, some uncertainty has been created among investors regarding the financial results of other major technology companies such as Microsoft, Amazon, and Meta.

Despite recent setbacks, shares of artificial intelligence-related companies have primarily contributed to market growth this year, with the S&P 500 index showing a growth of more than 8 percent so far in 2026. However, analysts warn that the market remains volatile. Market strategist Christina Hooper states that investors are currently in a very sensitive state and are more likely to react negatively to any small weakness in the market. The concern among investors about whether major technology companies can achieve the expected returns from their massive investments in artificial intelligence will have a significant impact on upcoming earnings reports.

With rising crude oil prices due to escalating conflicts in the Middle East, market attention on the Federal Reserve meeting has further intensified. Against the backdrop of Brent crude oil prices approaching the $100 per barrel mark, a fear has arisen that policymakers will take strong measures to control inflation, which remains above the Federal Reserve's 2 percent target. Although it is largely expected that the central bank will keep interest rates stable under the new chairman Kevin Warsh, market data indicates a 38 percent probability of interest rate hikes. BNP Paribas economists have warned that an unexpected interest rate hike cannot be entirely ruled out.

Generally, higher interest rates increase borrowing costs, slow economic growth, and raise yields on treasury bonds. This negatively impacts the stock market, and currently, the 10-year Treasury bond yield has risen to 4.7 percent, which is the highest value recorded since early 2025. In addition to Federal decisions and technology company reports, this week is the busiest week of the second quarter, with earnings reports expected from about one-third of S&P 500 companies, including Apple, Visa, Coca-Cola, and Chevron. Furthermore, to assess the future direction of the market, investors are also closely watching critical economic updates such as the US second-quarter Gross Domestic Product (GDP) and monthly inflation data.