A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here.
What's happening: Yesterday's "Before the Bell" focused on how Tesla (TSLA) celebrated earning more than $1 billion last quarter. Amazon (AMZN), Google parent Alphabet (GOOGL) and Microsoft (MSFT) just announced that they netted a combined $57 billion in profit during the same period.
"That level of profitability at the current scale is difficult to comprehend," Bespoke Investment Group said of Apple's $21.7 billion haul in a note to clients.
Google, which earned $18.5 billion, continued to be fueled by massive demand for online advertising as consumers spent more time shopping on their phones and laptops.
The company's core search advertising business posted revenue of $50.4 billion, a 69% increase from the year prior. Ad revenue from video platform YouTube surged 84% to $7 billion.
Apple, meanwhile, trumped Wall Street's expectations when it reported that iPhone sales jumped 50% year-over-year to $39.6 billion. That's especially significant given that the June quarter is typically Apple's slowest. The company also had to contend with a global shortage of computer chips.
Microsoft, for its part, was bolstered by the number of companies building out the infrastructure for remote work. Azure, Microsoft's cloud business, logged revenue growth of 51%. CEO Satya Nadella said usage of its Teams communication platform has "never been higher," with nearly 250 million monthly active users.
"With 40% of workloads in the cloud today poised to hit 55% by 2022, we believe this overall [work-from-home] and hybrid environment shift has accelerated the cloud trend as more [executives] are being forced to face the new normal/reality for their respective organizations," Wedbush Securities analyst Dan Ives said in a research note. Microsoft, he added, is " firmly positioned to gain more market share."
Investor insight: Shares of these companies have soared so much over the past 18 months that there isn't much room for error. Apple's stock is down more than 1% in premarket trading after it declined to provide revenue guidance for the current quarter, pointing to supply chain issues affecting the iPhone and iPad.
Alphabet is doing much better, with shares up nearly 4% in premarket trading. Microsoft's stock is about 1% higher.
On the radar: Regulators around the world are putting more pressure on top tech companies. So far, however, this hasn't hit their businesses.
Debate around the Fed is only getting louder
When the Federal Reserve reports its latest policy decision on Wednesday, it's expected to announce that it will keep its easy-money policy in place to provide ongoing support for the US economy and employment.
That course of action, however, is increasingly controversial.
"They're still running 2020 monetary policy in 2021, when the economy's much different," Peter Boockvar, chief investment officer at Bleakley Advisory Group, told me.
Boockvar pointed to clear signs of inflation, including news on Tuesday that US home prices rose almost 17% in May from a year earlier, a record jump. Meanwhile, the Fed continues to prop up the housing market by buying up $40 billion of mortgage bonds each month, part of a broader $120 billion asset purchase program.
"They should be announcing a taper," Boockvar said.
Some analysts think the Fed could lay groundwork Wednesday for when it ultimately decides to take a step back.
"While we don't think the Fed is ready to announce the start of the tapering process, we do expect the committee to announce that those discussions are taking place with a formal tapering plan coming in the next few months," Lawrence Gillum, fixed income strategist for LPL Financial, said in a note to clients.
But Boockvar thinks the Fed is moving too slowly.
"Let's say the Fed is wrong and inflation's not transitory — then there's a lot of catch-up they need to play," he said.
Counterpoint: In a column for CNN Business, Mark Zandi, chief economist at Moody's Analytics, argues that "it is wrong to get all worked up over today's high inflation," which he says will "soon abate." If that's true, the Fed's approach is exactly right.
What pandemic? Mask sales have dropped
The Delta variant of Covid-19 continues to foster uncertainty about the trajectory of the pandemic. But if mask sales are any indicator, many people are rushing to put the coronavirus in the rearview mirror.
The latest: When reporting earnings this week, 3M (MMM) said that sales of disposable respirators like N95 masks had fallen, and that it would start cutting back output. The company thinks demand peaked in the first three months of the year, in part thanks to stockpiling by governments and hospitals.
"We are now seeing a deceleration in overall health care demand and are adjusting production," CEO Michael Roman told analysts on Tuesday. "We are prepared to rapidly increase production in response to Covid-19-related needs or future emergencies when needed."
What 3M doesn't expect to wane is inflation — at least not this year. The company said that price increases slashed $0.17 off earnings per share last quarter.
"This headwind was larger than forecasted as we experienced broad-based cost increases for chemicals, resins, outsourced manufacturing and logistics as the quarter progressed," said Chief Financial Officer Monish Patolawala.
3M is now predicting a full-year inflation hit of $0.65 to $0.80 per share.
Boeing, Bristol-Myers, Garmin, McDonald's, Pfizer, Spotify and Tilray report results before US markets open. Facebook, Ford, PayPal and Qualcomm follow after the close.
Also today: The Federal Reserve's latest policy announcement arrives at 2 p.m. ET, followed by a press conference.
Coming up: On Thursday, July 29 at 11 a.m. ET, CNN Business presents "Foreseeable Future: A Conversation about the Workplace Revolution."
Join CNN Business' Kathryn Vasel in conversation with Microsoft CEO Satya Nadella, followed by a panel discussion with DocuSign CEO Dan Springer, Vimeo CEO Anjali Sud and BetterUp Co-Founder and CEO Alexi Robichaux.
To reserve a spot now, RSVP here.
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