Post-Fed Hangover: Amazon & Intel on Tap 29/10/2026
Market Wrap
U.S. stocks advanced Wednesday, extending their winning streak to three sessions as investors assessed the Federal Reserve's decision to leave interest rates unchanged and positioned ahead of major technology earnings.
The S&P 500 gained 0.28% to close at 7,743.98, while the Nasdaq Composite rose 0.27% to 26,549.85. The Dow Jones Industrial Average added 97.53 points, or 0.19%, to finish at 52,475.10.
The Federal Reserve held its benchmark interest rate at 3.75%–4%, following a quarter-point increase in September, its first rate hike since 2023. Policymakers acknowledged that inflation remains elevated but emphasized the need for additional economic data before considering further action.
Fed Chair Kevin Warsh reiterated the central bank's commitment to price stability, describing employment conditions as relatively strong. Investors interpreted the decision as a signal of patience rather than a meaningful shift away from the Fed's tightening stance.
Attention now shifts to Thursday's economic releases, including September's Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge. The first estimate of third-quarter GDP and weekly jobless claims will also provide fresh insight into economic growth and labor-market conditions.
Corporate earnings remain another major catalyst, with Caterpillar (CAT) and Eli Lilly (LLY) reporting before the opening bell, followed by Amazon (AMZN) and Intel (INTC) after the close.
With inflation data, economic growth figures and heavyweight earnings arriving together, investors face another potentially volatile session as markets assess the outlook for interest rates and corporate profitability.
Microsoft Surges as Alphabet Slumps, Exposing AI Spending Divide
Microsoft and Alphabet delivered sharply contrasting earnings results Wednesday, highlighting Wall Street's growing focus on whether massive artificial intelligence investments can translate into sustainable growth and profitability.
Microsoft (MSFT) gained approximately 3% in after-hours trading after reporting Azure cloud revenue of $33.2 billion, up 48% year over year. The company projected growth of as much as 50% in the current quarter, exceeding expectations and reinforcing confidence in its AI strategy.
Investors also welcomed Microsoft's 50% operating margin, demonstrating its ability to maintain strong profitability while expanding AI infrastructure. Analysts viewed the combination of accelerating cloud growth and disciplined spending as evidence that its investments are generating returns.
Alphabet (GOOGL), meanwhile, plunged more than 10% after reporting its first quarterly revenue and earnings miss in nearly four years. Revenue reached $127.58 billion, below the $128.22 billion expected, while adjusted earnings of $2.67 per share missed the $3.02 consensus.
The Google parent reported negative free cash flow of $9.07 billion, compared with expectations for a $2.70 billion outflow. Long-term debt surged to $125.1 billion, while the company maintained its full-year capital expenditure outlook of $195 billion–$205 billion.
Despite the disappointing results, Google Cloud revenue more than doubled to $30.7 billion, beating forecasts of $28.7 billion. However, search revenue of $63.35 billion missed expectations, adding to concerns over the company's broader performance.
The contrasting results underscore a widening divide in the AI trade. Investors are increasingly rewarding companies that demonstrate profitable growth while punishing those whose aggressive infrastructure spending outpaces cash generation.
With AI investment accelerating across Big Tech, profitability, free cash flow and capital discipline are becoming critical factors in determining market valuations.
Stocks on the Move
- Maplebear (CART): Shares gained 3% following reports that DoorDash could announce a deal to acquire the Instacart parent as soon as Thursday morning. DoorDash (DASH) slipped approximately 1%.
- Chipotle Mexican Grill (CMG): Shares climbed more than 5% after third-quarter comparable sales rose 2.1%, beating analysts' expectations for 1.5% growth.
- ServiceNow (NOW): Shares tumbled 15% after adjusted third-quarter earnings of $1 per share missed the $1.02 consensus. Fourth-quarter subscription revenue guidance of $4.245 billion–$4.255 billion was broadly in line with the $4.25 billion estimate.
- Fortinet (FTNT): Shares plunged 25% after third-quarter non-GAAP gross margin of 79.6% missed expectations of 80.1%, overshadowing stronger-than-expected revenue and earnings.
Watchlist: MSFT, GOOGL, AMZN, INTC, CART, DASH, CMG, NOW, FTNT, NVDA, AMD, AVGO, CAT, LLY, MA, MRK, COIN, SBUX
Key Economic Events Today
Economic Data (EST)
- 08:30 AM — USD Core PCE Price Index (MoM / YoY), PCE Price Index (MoM / YoY), Advance GDP (Q3), Initial Jobless Claims, Personal Income and Spending
Earnings
Before Market Open: Caterpillar (CAT), Eli Lilly (LLY), Mastercard (MA), Merck (MRK), Linde (LIN), Bristol Myers Squibb (BMY)
After Market Close: Amazon (AMZN), Intel (INTC), Coinbase (COIN), Starbucks (SBUX), Gilead Sciences (GILD), Sandisk (SNDK)
