US second-quarter earnings season entered a critical phase on Monday as major American companies prepared to report results. Investors on Wall Street focused on profit margins, tariff impacts and AI spending.

Analysts at FactSet expected blended earnings growth for the S&P 500 to remain positive year-on-year. The week ahead features results from technology, industrial and consumer-facing companies, with much of the market's attention on how tariffs and higher input costs have affected corporate margins.

Analysts polled by LSEG flagged forward guidance as the key variable driving share prices, given uncertainty over Federal Reserve rate policy. Early-season reporting from major banks, including JPMorgan and Citigroup, had already set a cautiously optimistic tone the previous week.

Strategists at Morgan Stanley and Goldman Sachs said continued heavy capital expenditure on artificial-intelligence infrastructure would be scrutinised for signs of returns on those investments. Market reaction is likely to hinge on whether companies raise or trim full-year outlooks, according to analysts at Bank of America.

Firms exposed to AI data-centre demand, such as chipmakers and cloud providers, were expected to draw the strongest investor interest. Consumer-facing names faced questions over softening discretionary demand.

Trading volumes typically rise during peak earnings weeks, the New York Stock Exchange noted. Investors were also weighing macroeconomic signals, including inflation running near 3% and expectations for the Fed's next policy meeting.