Market Quick Take - Alphabet Revenue Miss Spooks Markets - 29 October 2026

Date: 29 October 2026

Market Overview

The Federal Open Market Committee (FOMC) decided to maintain the federal funds rate at 3.75%–4.00%, with a vote of 10–2. Chair Warsh's comments indicated a slight dovish shift, leading markets to anticipate only two rate hikes over the next year. The Bank of Canada raised its policy rate by 25 basis points to 2.5%, marking its first hike in three years, while the UK Chancellor's budget maintained fiscal rules with various economic measures.

Macro Economic Insights

• The US goods deficit widened to $134.9 billion in September 2026, driven by a rise in imports.
• Canada's inflation is projected to average 3% in 2027, with growth forecasts adjusted to 1% for 2026.
• The UK budget included energy relief measures and a minimum wage increase, with growth forecasts adjusted by the Office for Budget Responsibility (OBR).

Equities Performance

US equities saw a slight increase, with the S&P 500 rising 0.3% and the Nasdaq 100 gaining 0.6%. However, Alphabet's disappointing revenue report led to a significant after-hours drop of around 10%. In contrast, Microsoft reported strong Azure cloud revenue growth, boosting its stock by nearly 3%.

Volatility and Market Sentiment

The VIX index fell to 16.91, indicating a low volatility environment, while traders adjusted their positions following the Fed's decision. The market showed a preference for single-stock risk over index protection.

Digital Assets

Bitcoin and Ethereum experienced slight declines, with Bitcoin trading around $79,731 and Ethereum at $2,305. Bitcoin miners benefitted from AI-related gains, but overall sentiment was affected by Alphabet's earnings report.

Commodities Update

Oil prices dipped below $114 amid diplomatic efforts regarding Iran, while natural gas prices surged due to supply constraints. Gold remained under pressure, trading around $4025 as market participants awaited further economic data.

Fixed Income Market

The US Treasury yield curve steepened following the FOMC meeting, with the 2-year yield dropping to near 4.70%. European yields also rose ahead of the European Central Bank's meeting, with expectations for future rate hikes being priced in.

Currency Movements

The US dollar weakened slightly post-FOMC but regained strength in Asian trading. The EUR/USD pair traded at 1.1140, while the USD/JPY fluctuated around 158.00 as traders anticipated the Bank of Japan's upcoming meeting.

Conclusion

The market is currently navigating mixed signals from earnings reports, central bank policies, and macroeconomic indicators. Investors are particularly focused on upcoming earnings from major companies and the implications of central bank decisions on future market movements.