From Fortune:

The S&P 500’s future is in limbo as 5 Big Tech companies including Microsoft, Alphabet, and Meta Platforms report earnings this week. The Federal Reserve’s decision on interest rates will follow, with investors on edge with S&P 500 at record highs. Investors are concerned that the Megacap tech trade might be too crowded, potentially opening them up to risk. Tech giants such as Microsoft and Alphabet are expected to kick off earnings reports this week. These major players in the AI market hold far-reaching significance.

Fears of over-exposure to just a few stocks are looming–some investors are nervous about where the quarter will take them. The Magnificent Seven tech companies, including Microsoft and Nvidia, hover around all-time highs. However, the market’s biggest stocks are largely overvalued. Despite these fears, Microsoft’s stock has hit an all-time high, more than $3 trillion. Although Megacap stocks are seen generally as overexposed, they continue to perform despite the crowded trade.

As Tesla reports lower-than-expected earnings, the stock took a major blow last week, dropping 12%. This may indicate a market correction as the world’s most valuable company, Microsoft, maintains an expensive stock price currently at a rate 33 times profits estimated over the next 12 months. Despite these concerns, there is still a sense of euphoria in the market as economic conditions remain favorable.



Read more: Big Tech earnings ‘crucial’ to markets this week