According to Chris Brigati, chief investment officer at SWBC, this week's Federal Reserve interest rate decision and earnings reports from major Big Tech companies will be crucial in setting the market's tone. Investors are watching closely after a volatile start to 2026, with concerns over valuations. A strong January often sets the stage for the year's performance, adding to the anticipation.

The Fed is widely expected to hold interest rates steady, citing persistent inflation. Economic data has been challenging to interpret due to last year's government shutdown. However, the economy's strength, with 3Q GDP growth of 4.4%, suggests the Fed will maintain a data-driven approach to policy. This comes as the market assesses its next move amidst a complex economic backdrop.

Brigati expects solid earnings from companies like Apple and Microsoft, though not evenly distributed. He sees the iPhone maker facing the toughest challenges. Big Tech has been riding high on elevated expectations, fueled by the AI trade. Until a major shock, earnings momentum is likely to remain high.

Investors will be closely watching the performance of the S&P 500 and related ETFs. With the AI sector's continued growth, markets will be looking to see if these companies can continue to defy traditional economic cycles. The market's reaction to these earnings reports will set the stage for the coming months.