Market Summary - October 29, 2026
US Market Overview
On October 29, 2026, Wall Street opened lower, with the Nasdaq down approximately 1.3%, the S&P 500 losing 0.3%, and the Dow Jones falling 0.2%. Despite strong US economic data, market sentiment remained weak, primarily due to disappointing earnings from major technology companies, particularly Alphabet.
Economic Data
The US GDP grew at an annualized rate of 3.4% in the third quarter, surpassing forecasts of 3.2%. However, PCE inflation aligned with expectations, showing annual inflation rising to 3.6% from 3.4% the previous month. This persistent inflation complicates the Federal Reserve's ability to cut interest rates, especially after a recent decision to maintain rates unchanged, despite some FOMC members advocating for a rate hike.
Technology Sector Performance
Alphabet's disappointing quarterly results significantly impacted technology stocks, leading to a notable decline in its shares. Investors expressed concerns over the company's heavy spending on AI development, questioning when these investments would yield higher profits and stronger cash flows. In contrast, Microsoft reported robust earnings, driven by growth in its Azure cloud business, highlighting a divergence in investor sentiment towards tech companies.
Company Earnings Highlights
Microsoft
- Revenue: $92.28 billion (up 19% year-over-year)
- Net Income: $36.63 billion (up 32% year-over-year)
- EPS: $4.92
- Azure Growth: 48% year-over-year
Microsoft's strong performance underscores the demand for AI and cloud services, with Azure being a key growth driver.
Alphabet
- Revenue: $127.58 billion (up 25% year-over-year)
- Net Income: $26.17 billion (down 25% year-over-year)
- EPS: $2.12
- Google Cloud Revenue: $30.71 billion (up 103% year-over-year)
- Capital Expenditure: $51.36 billion
Despite strong revenue growth, Alphabet's shares fell due to weaker earnings and rising capital expenditures, raising concerns about profitability and cash flow.
Looking Ahead
Amazon is set to report its third-quarter earnings, with investors keenly focused on its AWS cloud computing division and the implications of its AI investments. Expectations are for revenue of approximately $202.26 billion, with a significant emphasis on AWS growth as a key metric for profitability.