Investors will closely watch the coming week for fresh clues on interest rates and early signs from a major earnings season. Both could help determine whether the U.S. stock market rally still has room to continue.
The second half of 2026 started much like the first half ended. Major indexes remained sensitive to sharp moves in large technology stocks. Minutes from the latest Federal Reserve meeting, along with earnings from Delta Air Lines and PepsiCo, may offer important guidance for investors.
Tech Stocks Remain Under Pressure
Technology stocks, especially semiconductor shares, helped drive the market higher over the past few months. The S&P 500 gained 14.9% in the second quarter, marking its strongest quarterly performance since 2020.
However, tech shares have become more volatile recently. Several leading names ended the week with steep losses, raising questions about whether the rally can continue without stronger support from the sector.
At the same time, other areas of the market have performed better. Healthcare, industrial, and financial stocks have all shown strength over the past month. This has encouraged hopes that market gains may become broader and less dependent on technology.
Joe Mazzola, head trading and derivatives strategist at Charles Schwab, said investors will be watching to see whether this broader market participation continues. He added that a longer pullback in major technology winners could become a warning sign for the wider market.
Fed Minutes Could Shape Rate Expectations
Interest-rate expectations have changed sharply since the start of the year. Investors had initially expected rate cuts, which are usually supportive for stocks. Now, markets are considering the possibility of rate hikes in the coming months.
Those expectations eased slightly after a weaker-than-expected jobs report on Thursday. The data showed that U.S. job growth slowed sharply in June, reducing some fears of an immediate rate increase.
Still, investors remain focused on the Federal Reserve. Hawkish expectations increased after last month’s Fed meeting, the first led by new Chair Kevin Warsh. He stressed that the central bank would prioritize price stability, as inflation remains above the Fed’s 2% target.
Minutes from that meeting are due on Wednesday. They could provide more detail on how Fed officials are thinking about inflation, interest rates, and future policy decisions.
A Less Predictable Federal Reserve
Warsh has also suggested that the Fed may offer less forward guidance than before. In other words, the central bank may give fewer hints about its next moves.
This could make future Fed meeting minutes even more important for markets. Investors may need to study the details more closely to understand how policymakers are leaning.
Matthew Miskin, co-chief investment strategist at Manulife John Hancock Investments, said markets will want to know how hawkish the Fed has become. Investors will also look for signs of what the new Fed leadership needs to see before deciding the next move on rates.
One key issue is energy prices. Investors want to know how Fed officials viewed the inflation impact of energy costs, especially after prices eased from previous Iran war-related spikes. Another important question is whether Fed policymakers were united or divided during the meeting.
Higher Rates Could Challenge Stocks
Higher interest rates can create pressure for equities. They raise borrowing costs for companies and consumers. They can also push bond yields higher, making bonds more attractive compared with stocks.
According to LSEG data, Fed fund futures late Thursday showed roughly even odds that the central bank could raise rates by its September meeting.
James Ragan, co-CIO and director of investment management research at D.A. Davidson, said a more restrictive Fed would create risks for stock valuations. He added that investors need more information on how the central bank is thinking about the economy and inflation.
Earnings Season Becomes the Next Big Test
The coming week is relatively light for major U.S. economic data. However, updates on services and manufacturing activity could still help investors assess inflation trends.
Stocks have rebounded strongly in recent months after earlier declines linked to the U.S.-Israeli conflict with Iran. The S&P 500 is now up more than 9% in 2026, while the Nasdaq Composite has gained 11%.
Strong first-quarter corporate earnings helped support the rally. However, they also raised expectations for the second-quarter earnings season, which will gather pace later this month.
Delta and PepsiCo Set to Report
Two important early earnings reports are expected next week. Delta Air Lines and PepsiCo will both give investors insight into consumer spending trends.
Delta may offer clues about travel demand, while PepsiCo can provide a view of household spending on snacks and beverages. Together, these reports could help investors judge whether consumers remain resilient.
Overall, S&P 500 companies are expected to report second-quarter earnings growth of more than 24%, according to LSEG IBES.
Keith Lerner, chief investment officer at Truist Advisory Services, said earnings remain a key driver of the bull market. He noted that the main goal of this earnings season is to confirm that profit growth remains on track this year and can continue into next year.
Market Outlook
The stock market now faces two major tests: the path of interest rates and the strength of corporate earnings.
If the Fed signals a tougher stance on inflation, stocks could face renewed pressure. But if earnings continue to show strong growth, investors may gain more confidence that the rally can broaden beyond technology.
For now, markets remain focused on Fed clues, earnings updates, and whether tech stocks can regain momentum.
