Earnings will continue to take center stage this week, but many of the market’s big dogs reported last week. As first-quarter earnings roll in, a clear trend is that the artificial intelligence infrastructure buildout continues full steam ahead, and the impact is being felt across the economy. Amid the focus on earnings and AI, economic data will return to the forefront with the release of the April jobs report—watch for a deeper dive coming later this week.

AI is already replacing humans in fueling the US economy

When economists talk about the direction of the economy, consumers are usually described as in the driver’s seat. But now, the AI boom isn’t just showing up in earnings, it’s making itself felt in economic data such as last week’s first-quarter gross domestic product report. Exactly how big an impact AI is having on the economy is up for debate, but there’s a significant footprint no matter how you look at it, says Preston Caldwell, Morningstar’s senior US economist.

To gauge AI’s impact, many analysts look at data on private fixed investment in information processing equipment, Caldwell says. That measure was up 24% year-over-year in inflation-adjusted terms in the first quarter and contributed 0.5 percentage points to the overall 2.0% annual rise in GDP, one-fourth of total economic growth. That increase, he says, largely represents spending on semiconductors and other related aspects of the AI data center buildout, Caldwell says.

However, he cites two caveats. “First, much of that spending represents imported content, which doesn’t contribute to GDP,” he says. “But second, somewhat offsetting that, there’s a good argument that the Bureau of Economic Analysis has undermeasured IT equipment spending.”

Caldwell prefers to also look at research and development spending, plus AI companies’ other investments, alongside software spending. “High-tech categories accounted for more than all of the growth in private fixed investment as of the first quarter 2026, and around one percentage point to overall GDP growth.”

In context, “AI is the main demand-side driver of economic growth currently,” Caldwell says. “It’s true that the bulk of the surge in IT equipment investment is offset by higher imports in terms of official data. But software and other AI investment outside of data center construction has no such import offset, and it’s been massive as well.“

Lastly, he adds, “AI hype has driven stock prices higher, propping up consumer expenditure.”

Magnificent five earnings impress … for the most part

There was a lot for investors to digest on the earnings front last week, especially on Wednesday and Thursday when five of the Magnificent Seven stocks reported earnings. Stock investors offered a mixed verdict in the market on the results from Alphabet GOOG/GOOGL, Amazon AMZN, Apple AAPL, Meta Platforms META, and Microsoft MSFT. (Tesla TSLA and Nvidia NVDA were the odd companies out, with Tesla having reported on April 22 and Nvidia due on May 20). Morningstar analysts, meanwhile, found mainly good news in the results. Here’s a sampling of their thoughts.

Alphabet

Why it matters: A year ago, Alphabet was trading as if it had lost the artificial intelligence race. What a difference a year, and clear evidence that the firm is generating strong returns from AI, can make.

The clearest way to see these is in Google Cloud, where sales accelerated sequentially and annually. We estimate the firm’s Gemini API sales are now generating around $15 billion in annual revenue, up from a $9 billion run rate last quarter.

Amazon

Overall results are positive, as consumer spending remains stable, the expansion of grocery and same-day delivery continues to drive demand, and artificial intelligence supports surging AWS growth. Further, profitability is impressive against various profitability headwinds.

Apple

The iPhone’s growth, led by the iPhone 17, continues to impress, particularly in China. We also appreciate strong profitability amid steep memory price inflation. We believe high growth will continue through the year, led by strong iPhone 17 uptake and a pent-up refresh cycle.

Meta

Investors have been concerned about Meta’s ability to generate strong returns on its artificial intelligence investments. We see these quarterly results as further evidence that the firm is already generating billions of dollars from the large-scale AI investments in the form of ad dollars.

Microsoft

Results continue to look good from a variety of facets, as headline numbers came in ahead of our aggressive expectations on both the top and bottom lines. All three segments beat the high end of guidance. Critically, we see strength in Azure, in both traditional and artificial intelligence workloads. ... The stock remains one of our top picks.

Amid pressure on the Fed, regional presidents take a stand

While the Federal Reserve’s decision to keep interest rates unchanged at its meeting last week was nearly universally expected, one surprise was the extent of dissenting votes on the decision. Out of the 12 voting members, there were four votes against. One was Fed Governor Stephen Miran—President Donald Trump’s recent temporary appointee—who voted to cut rates as many had expected. However, the unexpected twist was the additional dissenting votes from the presidents of the Cleveland, Dallas, and Minneapolis regional Fed banks. The Fed statement said the trio “supported maintaining the target range for the federal-funds rate but did not support inclusion of an easing bias in the statement at this time.”

While many economists saw this move as reflecting concern about inflation risks, Daniel Clifton, the Washington-based head of policy research for Strategas Securities, had another take. The votes, he wrote, “were a warning shot to Kevin Warsh that they have little interest in cutting rates when he takes over” as Fed chair. But there may be even more to the story that he thinks is related to current Fed Chair Jerome Powell’s decision to stay on as a Fed governor when his term expires later this month.

Speaking of Fed officials flexing, was Fed Governor Christopher Waller also sending a message with his LinkedIn post this week?

April jobs report ahead

For the Fed, stable inflation is one part of its mandate, and the other is fostering maximum employment. The US economy has been in what economists call a “low fire, low hire mode” for some time, and forecasts are looking for that to continue in the April jobs report due out Friday morning. Economists are looking for job growth to cool back off in April to an increase of 50,000, according to FactSet, which would follow a surprisingly large gain in March of 178,000 jobs.