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Apple and Amazon, twin tech giants worth over $4 trillion, are about to bolster the economy’s upswing or spoil the party

We’ve heard from the Fed, the Commerce Department, and an army of economists. Now it’s time to hear from two of the other key pillars of the U.S. economy: Apple and Amazon.

The twin tech giants, which collectively account for more than $4 trillion of market cap as well as billions of dollars of consumer and business spending, are due to report quarterly earnings after Thursday’s market close.

The companies’ results—and just as importantly, their forecasts for the coming months—will add vital data that could confirm recent hopes that a recession has been avoided, or reignite worries about the business landscape.

“When Cook talks everyone else listens given Apple’s unique perch and perspective around consumer demand globally and what this means for the path looking forward,” Wedbush’s Dan Ives wrote in a recent note to investors.

From the sales of iPhones and Macs, to the volume of online shopping and the spending by companies on cloud computing services, Apple and Amazon together provide one of the most well-rounded snapshots of market conditions.

Amazon, which employs more than 1.5 million workers, is the world’s second largest online retailer (in addition to owning the Whole Foods supermarket chain, which Bloomberg recently reported is being overhauled in a bid by Amazon to go after Walmart’s brick-and-mortar empire).

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In July, Amazon announced that it had experienced the largest Prime Day sales ever. Prime members purchased over 375 million items and saved more than $2.5 billion in total (Amazon did not say how much money shoppers actually spent), compared to 300 million items and $1.7 billion last year. This revenue won’t show up in the second quarter results, but it’s a positive sign for consumer spending, which accounts for roughly two-thirds of U.S. GDP.

Taylor Swift vs the iPhone

D. A. Davidson analyst Tom Forte wrote in a recent report that the Prime Day numbers could raise hopes of a spending pickup in the home and consumer electronics categories, following a phase in which post-COVID “revenge travel” and in-person, live events have captured a lot of consumers’ discretionary income.

Compared to Taylor Swift or Beyonce concerts, Apple may have a hard time competing right now—especially given that the iPhone is awaiting its Fall upgrade to a new model. Analysts expect Apple to post its third consecutive year-over-year revenue decline during the recently ended quarter, and many investors will be more interested in the company’s outlook for the remainder of the year.

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D. A. Davidson’s Forte told Fortune the iPhone is more like a consumer staple than a discretionary item — it’s a necessity, not a rewarding purchase. That’s not a bad thing in a challenging macro-economic environment — iPhones keep selling while consumers do without other products. And indeed, Apple’s stock is up nearly 60% this year, as investors find comfort in its stable business.

But while expectations for iPhone sales are modest, Forte says a key question is what it would mean if iPhone sales do worse than expected?

“If Apple reports weaker than expected iPhone sales…then it would suggest that the macroeconomic pressure may be negatively affecting products that we perceive to be a consumer staple, not a discretionary item,” Forte said.

Many investors will also be looking to overseas markets like China and India for signs of strength in Apple’s business and in the global economy.

Amazon’s cloud barometer

If consumer spending disappoints in Apple’s or Amazon’s reports, the performance of Amazon’s cloud business could become particularly important to the broader economic picture. When the Commerce Department reported that U.S. GDP increased 2.4% in Q2, it noted that business spending surged by 7.7%. That’s an encouraging sign for cloud computing services that cater to corporate customers.

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Amazon’s cloud rivals delivered mixed results in the second quarter, with Microsoft reporting weaker-than-expected cloud revenue growth, while Google’s cloud business posted its first ever profit. Analysts expect Amazon’s AWS cloud business revenue to increase by 9% year-over-year in Q2, according to CRN.

While Amazon AWS is in a fierce battle for market share against Microsoft and Google, its position as the dominant cloud provider makes it an important gauge of broader corporate cloud spending.

For Amazon investors as well as for those reading economic tea leaves, the AWS outlook will provide plenty of fuel for thought.

This story was originally featured on Fortune.com

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