Good morning! After a long wait, it's time for another quarterly round of Big Tech earnings coming after the bell, led by Alphabet (GOOG) and Tesla (TSLA).

The earnings come amid some stakes (Keep reading...) but also some momentum.

On Tuesday, the S&P 500 (^GSPC) gained 0.9%, the Nasdaq (^IXIC) 1.3%, and the Dow (^DJI) 0.7% as chip stocks made another big move — this time to the upside.

What we're watching Wednesday: Besides Big Tech, we'll get more details about a clearly bad quarter from IBM (IBM), results from AT&T (T), and a SaaSpocalypse check from ServiceNow (NOW).

Yahoo Finance Morning Brief is written by Ethan Wolff-Mann.

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An Optimus humanoid robot showcased at the Tesla booth at the 8th CIIE in Shanghai, China on November 6, 2025. (CFOTO/Future Publishing via Getty Images)

Alphabet and Tesla are set to open their books after the bell on Wednesday to kick off Big Tech's earnings season.

While both of these "Magnificent" companies swing serious weight around in the S&P 500, investors are looking for different things from both of them.

Google (Alphabet), as the more pure-play hyperscaler, will be seen as a bellwether of the AI trade as the first company to answer the big question: Where's the profit? (Google preview here.)

Investors want to see the massive investments transformed into money-making as the AI trade's monetization becomes as important as any market-share land grab or commitment to winning by writing big checks. 

Of course, investors still want the confidence of a company continuing to back itself via spending (just not too much), as well as the promise of competitive models and R&D amid cheaper Chinese competition.

So far, Google's done a good job, and its stock shows it.

Tesla, on the other hand, is about as unique a company as you can get — and stands for itself.

Instead of being representative of anything (EV trade, AI, etc.), this is more of a check on CEO Elon Musk's moonshots. With EVs somehow not the company's big problem this quarter, investors want to know about its spending plans in its next phase: Optimus robots and robotaxis. (Tesla preview here).

President Donald Trump takes questions from the media during a bilateral meeting with President of Lebanon Joseph Aoun in the Oval Office of the White House on July 21, 2026, in Washington, D.C. (Kevin Dietsch/Getty Images)

In a very short time, two of the Trump administration's biggest risks to markets have reemerged.

After investors hoped the Iran situation was on the mend following a ceasefire and restoration of the Strait of Hormuz's traffic, tensions and oil prices have jumped and continued to surge.

For consumers and businesses, the inflation question's most recent answer had to be thrown out. And no end is in sight as the war risks escalating further.

As President Trump plays down any prospect of talks, investors were hit by a second blow: a resurgence of the trade war as the White House placed new tariffs on Canada and readied a fresh barrage of broad tariffs using a different law.

As one analyst at Raymond James put it, even if the White House's tariffs expire or get struck down, they're clearly signaling plans to continue trying, making any challenges into a game of Whack-a-Mole. There are plenty of trade laws to use in over 250 years of American government.

These two issues pose significant inflationary risks and corporate planning headaches and have pushed bond yields into ominous territory.

Timing is a factor too. They're both adding uncertainty just as a third risk emerges: the need for Big Tech to hit its numbers and avoid an earnings-season disappointment.

The S&P 500 is still enjoying its climb to 7,500 — 9.5% year to date — but expectations are high. As are the stakes, if the touchiness of the memory chip industry is anything to go by.

OpenAI CEO Sam Altman even met with Bernie Sanders in June. (Photo by Nathan Posner/Anadolu via Getty Images)

The AI movement is trying to win with its transformative tech and massive capabilities, convincing companies and investors to spend.

But it's also using the old K Street playbook by going after the guys who make the rules.

OpenAI and Anthropic have both hit record lobbying expenses in D.C., spending over $3 million in Q2. While that's double what they spent the year before, it's practically nothing compared to their other investments.

Of course, Washington lobbying is just one way to do it.

Thanks to super PACs, the industry is over a quarter of a billion dollars in ahead of the midterm elections this fall. So far, with the exception of chipmakers trying to sell in China, it's been a relatively rules-free Wild West atmosphere, even after Anthropic's Mythos model demonstrated frightening power that spooked the big banks.

But these companies jumping to the top of the Q2 lobbying spending list is a reminder that AI will be firmly on the ballot this fall. And the campaigns have already started.

A pedestrian walks by a now-hiring sign posted at a gas station on June 5, 2026, in Los Angeles. (Justin Sullivan/Getty Images)

The overall data that is guiding the Fed says that the labor market is healthy and inflation is still too hot, but, perhaps, going in the right direction.

But while the larger averages may tell palatable stories, the lower leg of the K-shaped economy continues to pinch.

A new Glassdoor survey based on May's data showed that over half of laid-off workers felt pressure to accept less pay — a clear measure of desperation amid rising prices.

The overall layoff rate might be low, but long-term unemployment is at its highest level since December 2021 — above 27% of the total number of jobless people — thanks to the "low hire, low fire" paradigm that's characterized the labor market for years now.