Signage at Google headquarters in Mountain View, California, US, on Thursday, Oct. 23, 2025.
Benjamin Fanjoy | Bloomberg | Getty Images
The news is coming in fast and thick. Strap in.
First, interest rates.
The U.S. Federal Reserve lowered rates by 25 basis points, as expected by traders. But Chair Jerome Powell cautioned that another cut in December, which the market had been pricing in with more than 90% certainty, “is not a foregone conclusion.”
His statement threw cold water on the markets, sending most stocks lower and Treasury yields higher.
Next, Big Tech earnings.
Alphabet, Meta and Microsoft reported earnings that beat analyst expectations on the top and bottom lines. Notably, Alphabet’s quarterly revenue topped $100 billion for the first time.
And finally capital expenditure.
Capex is really the big story here. Alphabet, Meta and Microsoft are saying they are going to spend much more money.
Alphabet not only raised its capex estimate for fiscal year 2025 to a “a range of $91 billion to $93 billion” from its earlier forecast of $75 billion to $85 billion, but is now expecting “a significant increase” in capex for 2026, according to finance chief Anat Ashkenazi.
Meta hiked the low end of its capex guidance for the year to $70 billion from $66 billion. “Being able to make a significantly larger investment here is very likely to be a profitable thing” CEO Mark Zuckerberg said in the earnings call.
And Microsoft’s Chief Financial Officer Amy Hood said capex in the firm’s fiscal first quarter came in at $34.9 billion — higher than the $30 billion figure estimated in July. The capex growth rate for fiscal 2026 will also surpass that in 2025, Hood added.
The crux is that spending on artificial intelligence isn’t going to slow down, at least for the next year, thanks to increasing demand for AI services. Fears of a bubble can be deferred for now.
That’s it for the day. We all can take a breather — at least until headlines emerge from U.S. President Donald Trump and China’s Xi Jinping’s meeting later in the day.
What you need to know today
And finally…
Chinese President Xi Jinping and U.S. President Donald Trump
Sergey Bobylev | Kent Nishimura | Reuters
Trump-Xi meeting nears with high stakes and hopes, but few details
A high-stakes meeting between U.S. President Donald Trump and Chinese President Xi Jinping could yield a breakthrough in the trade relationship between the two economic superpowers.
But while both the Trump administration and Beijing are projecting optimism ahead of the sit-down, specifics about the summit remain unclear — and some experts are skeptical of the White House’s confidence on achieving a favorable outcome.
— Kevin Breuninger
