Wall Street entered one of the busiest weeks of the second-quarter earnings season on Monday, with investors positioning ahead of results from Microsoft, Meta Platforms, Apple and Amazon due later in the week. Analysts said the reports would test the market's elevated valuations tied to artificial intelligence.

The S&P 500 and Nasdaq Composite entered the week near record levels, leaving little room for disappointment. Strategists at Morgan Stanley and Goldman Sachs said the scale of capital spending on AI data centres would be the single most scrutinised metric, alongside cloud revenue growth at Microsoft Azure and Amazon Web Services.

Several large companies were scheduled to report on Monday itself, giving early signals on consumer and industrial demand. Investors also weighed the impact of continuing US tariff threats, after President Donald Trump's renewed levies on trading partners raised concerns about margins and supply chains among multinational firms.

The week's results carry outsized weight because the largest technology companies now account for a substantial share of the S&P 500's market value. A CME Group spokesperson noted heightened options activity around the megacap names, reflecting expectations of sharp post-earnings moves.

Fund managers cautioned that guidance, rather than backward-looking figures, would drive market direction. "The bar is high, and the market wants proof that AI spending is turning into revenue," said an equity strategist at UBS Global Wealth Management.