Earnings season is off to a rocky start, and the pattern is clear: even when companies beat expectations, the upside is minimal, while any stumble leads to sharp losses. Google’s performance sums it up—an initial pop quickly faded, ending with less than a 1% gain despite beating estimates. Meanwhile, misses like ASML’s are being punished brutally, with a double-digit slide that didn’t stop after day one. TSMC, another bellwether, briefly rallied post-earnings but couldn’t hold its gains, starting a losing streak instead.

This is classic late-cycle behaviour: markets are priced for perfection after a long run-up, and even “good” results aren’t enough to move the needle higher. Investors are demanding more than just a beat—they want reassurance on future growth, margins, and clear evidence that AI, cloud, or consumer demand isn’t stalling out.

Now all eyes turn to the Mag 7—META, Amazon, Apple, and the rest—set to report next week. These giants have the firepower to change the mood if they can deliver not just strong earnings, but bullish forward guidance. However, given the market’s unforgiving mood, it might take more than just another round of “AI tailwinds” to reignite enthusiasm. Unless the Mag 7 can demonstrate accelerating growth, improved margins, and clear leadership in the next phase of tech, any relief rally could be short-lived.

In short, the burden of proof is now on the biggest names to show that the bull market narrative still has legs. If they disappoint, the current pattern of muted gains and sharp losses could become the new normal—at least until the next big catalyst arrives.