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Related tickers and likely impact
AMZN
• NeutralAmazon
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Consumer Discretionary |
| Industry | Broadline Retail |
| Market cap | $2.7T |
| Close on 10/28/2026 | 254.65 |
| Change that session | +0.61% |
GOOGL
• NeutralAlphabet Inc. (Class A)
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $4.0T |
| Close on 10/28/2026 | 325.61 |
| Change that session | +1.57% |
MSFT
• NeutralMicrosoft
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Systems Software |
| Market cap | $3.9T |
| Close on 10/28/2026 | 530.83 |
| Change that session | -0.09% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
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U.S. stocks rose Monday, helped by enthusiasm for AI, but this week's earnings from Alphabet, Microsoft and Amazon will test whether that optimism holds under closer scrutiny of the technology's enormous costs. The three companies have nearly $1.7 trillion in combined backlog and plan to spend as much as $600 billion this year. Investors now want to know whether that spending is paying off.
- Google, Microsoft, and Amazon have to justify the AI spending boom this week
Google, Microsoft and Amazon report quarterly earnings this week, and the key question is how well their AI spending pays off compared with expected returns. These companies, which lead a week of results accounting for more than a third of S&P 500 earnings, face the same scrutiny Meta faced. Bank of America said hyperscalers' 2027 capex estimates have already been revised up by nearly 90% year to date. Competition for capital is intensifying as AI labs prepare large IPOs and businesses scale back AI spending and use cheaper models, making it more important to justify AI costs.
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Microsoft, Alphabet and Amazon are set to report earnings this week, as investors look for more clues on where the AI trade is headed, while the Federal Reserve announces its policy decision on Wednesday. Koyfin data show Microsoft expected to post EPS of $4.72 and revenue of $90.75 billion, with focus on Azure growth after it guided to about 45% in July. Wall Street expects Amazon EPS of $1.96 on $202.20 billion in revenue, and Alphabet EPS of $2.97 on $127.83 billion, after raising its capital expenditure outlook in July. CME FedWatch shows a 90% probability that the Fed holds rates between 3.75% and 4.00%, with the two-year Treasury yield in focus. SK Hynix is also expected to report third-quarter revenue of $74.81 billion.
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The S&P 500 is up about 12% in 2026 excluding dividends, while Microsoft is up about 8%, Amazon about 7%, and Alphabet about 2% (based on its Class A shares); together these three stocks make up about 15% of the index. Microsoft and Alphabet report quarterly results on October 28, and Amazon follows on October 29. By the author's estimate, Apple and Nvidia added about 3 percentage points to the index's 12% gain, while the three laggards added about 1 point; had they matched the index, the fund would have gained almost 13%. Each stock has moved roughly 10% or more the day after at least one report this year. For a $10,000 position in an S&P 500 fund (about $1,500 in these three stocks), reactions like those after their July reports would add about $110, while reactions like those after the January and February reports would take away about $80. The author would not change anything in an S&P 500 fund before October 28.
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Latest news
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- European Central Bank keeps key interest rate on hold at 2.5%
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Alphabet (GOOGL) fell about 13% in early trading Thursday after third-quarter results, putting it on track to erase more than $400 billion in market value, the second-biggest one-day loss ever for a US-listed company behind Nvidia's roughly $593 billion on Jan. 27, 2025. Google Cloud revenue more than doubled to about $31 billion and the Gemini app passed 1 billion users, but search revenue rose 12% to about $63 billion, short of the roughly $65 billion estimate. Free cash flow swung to a loss of about $9 billion as AI spending climbed, and the company's stakes in AI labs also weighed. Pivotal Research CEO Jeffrey Wlodarczak said bears will argue AI is starting to seriously hurt the search business, while CFRA's Angelo Zino said the pullback probably represents an opportunity. Alphabet has lost more than $1.3 trillion since its May record, and Amazon's results after Thursday's close will show whether the problem is specific to Google's search business.
- Monetary policy decisions
The ECB Governing Council decided to keep its three key interest rates unchanged: 2.50% on the deposit facility, 2.65% on main refinancing operations and 2.90% on the marginal lending facility. Energy prices have kept rising, posing upside risks to inflation and downside risks to growth, while underlying inflation has been broadly stable and wages show no material response yet. Financing conditions have tightened since the last meeting, which is likely to weigh on inflation and growth. The Council aims for inflation to stabilise at its 2% target in the medium term, is not pre-committing to a rate path, and stands ready to adjust all its instruments within its mandate.
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The Fed held its target range at 3.75% to 4% on October 28, 2026, in a 10-2 vote, with Lisa D. Cook and Beth M. Hammack favoring a 25-basis-point hike. Chair Kevin Warsh said first-half GDP was revised up to 2.4% from 1.8% and third-quarter growth is likely above 3%, but pushed back on the idea that the economy is overheating. The Atlanta Fed's GDPNow stood at 3.3%, and a futures-based measure put the odds of a December hike at 86.0%. Headline PCE inflation was 3.4% in August and core was 3.0%, mostly tied to energy and core goods affected by the Middle East conflict and tariffs, which rate hikes do little to address. SPY is up 13.26% year to date, but its large tech holdings make it sensitive to a 10-year yield above 5%, and its outlook weakens if September core PCE tops 0.3% or the yield passes its October 5 high of 5.31%.
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