By Lewis Krauskopf

NEW YORK (Reuters) -Investors are homing in on a flood of earnings reports from Wall Street’s tech and Internet giants, as the high-growth stocks that have led markets higher for years face pressures from regulation, supply-chain snags and rising Treasury yields.

Apple Inc (NASDAQ:), Microsoft Corp (NASDAQ), Google parent Alphabet NASDAQ (NASDAQ) Inc. Amazon.com Inc NASDAQ: Facebook Inc All five companies (NASDAQ:) will report next week’s earnings. These five companies together account for more than 22% of the weightings in the and give their stocks huge sway over other indexes.

Overall, companies representing 46% of the S&P 500’s market value are due to post quarterly results next week, according to Goldman Sachs (NYSE:).

Strong earnings reports have helped lift the S&P 500 to fresh record highs, with the benchmark index rising 5.5% so far in October. The index saw its largest monthly percentage decline since March 2020, when the pandemic started.

Although investors are expecting large tech firms to post strong profits, most will also pay attention to whether or not they can sustain this growth. It will also be important to examine any future forecasts on supply issues, like the shortage of chips that has affected many global industries.

Some signs have been seen that tech companies might have some challenges ahead of them. Intel (NASDAQ) IBM The stock fell sharply following their report disappointment this week.

Facebook shares dropped 5% after Friday’s events. Snap Inc Snapchat Inc. (NYSE:) claimed that privacy settings implemented by Apple to iOS devices have hampered its ability target and measure digital advertising.

James Ragan (director of wealth management research, D.A.) stated that “I would anticipate the potential for greater volatility.” Davidson. We might just get the chance for these large companies to disappoint us a bit.”

Sectors that have shown the most vulnerability to changes in the economy have led market gains, with financials and energy gaining 11% and 8 respectively. The S&P 500 technology sector is up 6% month-to-date.

In the aftermath of the pandemic many tech-focused businesses saw a surge in sales. This was due to a change in consumer behaviour, economic lockdowns, and the shift towards working remotely.

“The question then becomes, can they keep it up?” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. How do growth rates compare for large technology companies?”

BofA Global Research’s survey earlier this month revealed that funds managers have a slightly lower technology weight than their 20-year average. At the same time, they named “long tech” as the market’s most crowded trade for the fourth straight month.

Apple will likely be discussing supply chain issues, such as the shortage of semiconductors. Amazon might offer insight on how logistics problems could impact holiday shopping seasons.

“If … Apple says, ‘Yeah, we would have sold a lot more phones except for the chip shortage,’ you think it’s really severe then because they are probably first in line to get chips from everybody,” said Peter Tuz, president of Chase Investment Counsel.

Investors should be wary of any U.S. government intervention in these massive companies.

The U.S. Consumer Watchdog has requested information from several tech companies about how they collect and use payment data.

The longer-term risk to technology and other growth shares could also be posed by a steady rise in Treasury yields. They move in an opposite way to bond prices. The future cash flows are less important than the company’s valuation, so they can be more heavily discounted in standard models. To 1.64%, the 10-year Treasury yield has gained 35 basis points over the last month.

“It hasn’t been all good news on the earnings front,” wrote Art Hogan, chief market strategist at National Securities. Although the positive news seems to have won the war against the negatives, we still have some bumpy roads ahead.