Awaiting AE recommendation - Can be rejected?
In journals that use Manuscript central, there are a few possibilities. Since there is no way to know specifics, in general, and AE can do one of the following depending on how the recommendation task is set up:

Make a recommendation. (Accept, reject, more reviews needed).
Make a decision. (some journals allow this at this point in the workflow)
Add more reviewers, and continue the peer review process.

Hope this helps.
Note: I am a ScholarOne employee, but my opinions/answers are my own.