Stocks face a twin set of risks over the coming weeks that could determine the market's path for the rest of the year.

Bank earnings and bond yields could either support the solid start to the fourth quarter by helping the broader market catch up with tech stocks, or set the wheels in motion for a late-year pullback that could hack away at this year's hard-won gains.

The backdrop for stocks is already a tricky one: Investors are grappling with surging bond yields and higher oil prices, an artificial-intelligence investment race that has siphoned capital away from other sectors, and a Federal Reserve that is unwilling to verbalize its inflation-fighting strategy. And yet, the S&P 500 has been buoyant, rising 2.1% since the start of the month and reaching a fresh record of 7818 points last week. Its 14% gain for the year, meanwhile, is firmly ahead of the 11.4% rise posted over the same time frame in 2025.

In fact, the benchmark's October gains have outpaced those of Nasdaq Composite for the first time since April -- a possible sign that some of the market's reliance on tech and the artificial-intelligence trade is starting to ease heading into the third-quarter earnings season.

That differential, it seems, could be crucial for market performance over the final months of the year.

Bank earnings this week could kick-start the conversation about the market's near-term future. Solid results could push lagging stocks to catch up with the tech sector -- that would look like broadening gains and a firmer S&P 500 over the final months of the year.

But if banks disappoint, the broader risk backdrop could easily blunt gains for the tech sector while keeping the rest of the market trading in the red. (Only three of the market's 11 sectors are trading in positive territory over the past month, and of those, only healthcare is outside of tech's embrace.)

LSEG data suggest the financials sector, which includes JPMorgan Chase and the six big Wall Street banks that report third-quarter earnings this week, will post a collective year-over-year earnings gain of just 4.9%.

That's well south of the 66.5% surge expected for the tech sector, which includes Nvidia, Apple, and Microsoft, and the 47.8% advance penciled in for communications services, which houses Facebook parent Meta Platforms and Google parent Alphabet.

The muted earnings growth estimates have largely been reflected in the financial sector's underperformance of late; it has lagged behind both the S&P 500 and an equal-weight version of the benchmark over the past six months. Financial stocks have also fallen some 6.3% since topping out for the year in early September, compared with a 7.8% advance for an index of the Magnificent Seven tech stocks.

"Of all the market metrics we follow, the relative performance of Financials is the one that is perhaps the most important for the near-term direction of the equity markets," said Mike Wilson, Morgan Stanley's chief U.S. equity strategist.

Wilson says he can't signal the "all clear" for broader stock performance until the sector -- a key leading indicator for U.S. economic growth -- resumes its early year gains.

But a stronger earnings performance from banks will also need a parallel rally in the bond market. U.S. Treasury yields have seen a markedly worrying move higher over the past four months, largely in concert with the surge in oil prices tied to the U.S. war with Iran.

The benchmark 10-year note's yield has jumped from around 3.96% in late February, just prior to the first U.S. attacks in the Gulf, to around 5.29% today, near its highest level since 2007. Bond prices and yields move inversely.

Longer-dated 30-year bond yields, meanwhile, have surged more than 100 basis points over the same period and hit 5.73% last week, its highest point since 2002.

Thus far, however, analysts seem comfortable with the higher-yield backdrop. It is consistent with bets on stronger economic growth and Fed rate increases, as opposed to a worrying spike in inflation pressures that would be left unchecked by the central bank.

But whether that view extends into the end of the year and beyond remains to be seen. Oil prices are rising amid renewed conflict in the Gulf, and President Donald Trump has intimated he might support Saudi Arabia's effort to thwart attacks from Iran-backed Houthi rebels.

Wilson, for his part, says both a measured September inflation report, expected on Wednesday -- and detailed commentary from Fed Chairman Kevin Warsh to the International Monetary Fund on Friday -- "could be enough to ease pressure on both policy-rate expectations and the long end [of the bond market]."

"With the market already priced for more tightening, the bar for some relief doesn't look especially high," he said.

But nor is the chance of correction. Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets suggests a notable drawdown is "overdue," given the market's late summer resilience to the rise in bond yields and the lack of a de-escalation in the Iran war.

"The S&P 500 has tended to experience a meaningful pullback near the beginning of [Fed] hiking cycles dating back to the mid-1990s," she said, noting the absence in 2022 when the Fed started normalizing rates after the Covid pandemic.

"We are mindful that yields have been anchored to oil prices since the Iran war began, and that positive developments on the war could relieve this pressure and spark upside in stocks," she said.

Calvasina adds, however, that another move higher in bond yields could spark concerns of slower gross domestic product growth -- which could trigger a larger drawdown in stocks that could clip as much as 20% from broader equity indexes.

We're not there yet, of course, but the next few weeks, and the midterm elections in early November, will likely determine how stocks finish one of the most compelling years on record.