Microsoft Corporation ( MSFT ) reported an all-around beat for fiscal Q1 '26 on October 29, but the market did not seem to love what they saw. The stock is trading aboutDaniel Martins is the founder of independent research firm DM Martins Research. The firm's work is centered around building more efficient, easily replicable portfolios that are properly risk-balanced for growth with less downside risk. His work has been featured on Seeking Alpha and other platforms through 2,000+ articles, and it has been c ...

Group 1: Market Overview - The U.S. stock market experienced a collective decline, with technology stocks leading the drop due to concerns over increased capital expenditures from major companies like Meta and Microsoft [1][2] - The Dow Jones Industrial Average fell by 109.88 points to 47522.12, a decrease of 0.23%; the S&P 500 dropped by 68.25 points to 6822.34, down 0.99%; and the Nasdaq Composite fell by 377.33 points to 23581.14, a decline of 1.57% [1] - The Nasdaq China Golden Dragon Index decreased by 1.88%, with notable declines in stocks such as Bilibili (over 5%), NetEase (over 4%), Alibaba (over 3%), and JD.com (nearly 3%) [1] Group 2: Company-Specific Performance - Meta Platforms saw a significant drop of 11.3%, marking its largest single-day decline in three years, following concerns about a substantial increase in capital expenditures projected for 2026 [2] - Microsoft shares fell by 2.9% after reporting a capital expenditure of nearly $35 billion for the first fiscal quarter, with warnings of further increases throughout the year [2] - Amazon's stock surged by 11% after reporting Q3 earnings of $1.95 per share, exceeding expectations of $1.57, and revenue of $180.2 billion, surpassing the anticipated $177.9 billion [3] - Apple's Q4 revenue reached $102.47 billion, exceeding market expectations, with a forecast of double-digit growth in iPhone sales for the current quarter despite supply constraints [3] Group 3: Sector Performance - Among the 11 major sectors in the S&P 500, 7 sectors declined, with the consumer discretionary sector experiencing the largest drop of 2.6% [4] - The real estate sector was the only one to show positive performance, increasing by 0.7% [4] Group 4: Economic Indicators - The Federal Reserve lowered interest rates by 25 basis points, but uncertainty remains regarding future rate cuts, with the probability of a December cut dropping from over 90% to about 70% [3]

Market Overview - The U.S. stock market faced pressure with all three major indices closing lower: Nasdaq down 1.57%, S&P 500 down 0.99%, and Dow Jones down 0.23%, primarily driven by declines in technology stocks [1] - Meta's stock fell 11.33%, marking its largest drop in three years, while Microsoft's stock decreased by 2.92%, as investors expressed concerns over rising expenditures in the AI sector [1] Semiconductor Sector - The semiconductor sector also experienced a downturn, with the Philadelphia Semiconductor Index dropping 1.53%, where 22 out of 30 component stocks declined, including AMD down 3.59%, Broadcom down 2.46%, and Nvidia down 2%, with its market value falling below $500 billion [2] - Analyst Matt Maley from Miller Tabak indicated that while this does not suggest an imminent AI bubble burst or a major market reversal, it does increase the likelihood of a short-term pullback [2] Chinese Stocks - Most popular Chinese stocks also saw declines, with notable drops including Xiaoma Zhixing down 6.79%, Baidu down 4.54%, Alibaba down 3.36%, Tencent Music down 3.23%, JD down 2.88%, Li Auto down 2.34%, NIO down 1.82%, Pinduoduo down 1.5%, and Xpeng down 0.99% [2] Economic Concerns - Ongoing debates regarding the U.S. economic fundamentals and policy direction were highlighted, with Goldman Sachs CEO David Solomon warning that if U.S. economic growth does not accelerate, rising debt levels could pose a "cleansing" risk to the economy [2] - Solomon noted that fiscal stimulus and aggressive fiscal operations have become deeply embedded in the U.S. and other economies, exacerbated by pandemic-related measures, and emphasized that the key to overcoming these challenges lies in growth [2] Recession Outlook - Solomon also stated that the likelihood of a recession in the near term is "low" and dismissed concerns that a few bankruptcy cases could trigger a systemic credit crisis in the U.S. [3] Federal Reserve Criticism - U.S. Treasury Secretary Scott Bessen criticized the Federal Reserve's recent cautious statements, suggesting that the Fed needs comprehensive reform despite appreciating the recent 25 basis point rate cut [4] - Bessen pointed out that the Fed's inflation forecasts have been inaccurate and indicated plans to conduct a second round of candidate interviews in early December to select a successor for Fed Chair Jerome Powell, aiming for a leader who can reshape the Fed's internal processes and operations [4]

Group 1: Market Overview - Major US stock indices opened lower on October 30, with the Dow Jones rising by 0.44%, while the S&P 500 and Nasdaq fell by 0.44% and 0.91% respectively [1] - Concerns about potential AI investment bubbles have resurfaced as significant capital expenditures by tech giants raise investor apprehensions [1] Group 2: Federal Reserve Insights - Federal Reserve Chair Jerome Powell indicated uncertainty regarding a potential rate cut in December, highlighting strong disagreements among committee members [3][4] - The likelihood of a December rate cut dropped from 90% to 67% according to CME FedWatch data [5] Group 3: Earnings Reports from Tech Giants - Alphabet, Meta, and Microsoft reported a combined capital expenditure of approximately $78 billion in Q3, an increase of 89% year-over-year, primarily for data center development [7] - Meta's stock plummeted nearly 12% following its earnings report, attributed to unexpected high capital expenditures and warnings of significantly higher spending in 2026 compared to 2025 [7][10] - Microsoft also faced investor skepticism regarding its substantial AI investments, with Q3 capital expenditures reaching a record $34.9 billion [11] Group 4: Company-Specific Developments - Meta's Reality Labs division reported a loss of $4.4 billion in Q3, with revenues of only $470 million, raising concerns about its AI-related investments [10] - Despite the losses, Meta's CEO Mark Zuckerberg emphasized the potential of smart glasses and the importance of adequate investment in AI [10] - Microsoft CFO Amy Hood acknowledged the ongoing high demand for AI services, despite the company's significant investments [11]

Earnings Reports - Meta reported a 26% revenue growth, reaching $51.2 billion, but aggressive AI spending raised concerns, increasing to $70-72 billion from $66-72 billion [2] - Microsoft achieved $77.7 billion in revenue, an 18% increase, with Azure growth at 40%, but AI spending surged 74% during the quarter, causing investor unease [3] - Alphabet generated $102.3 billion in revenue, a 16% growth, with AI capex rising to $91-93 billion, but confidence remained due to strong cloud performance [4] - Overall, the earnings from these companies indicate aggressive AI investment and sustained earnings power, though investor anxiety about future payoffs persists [5] Trade Agreement - President Trump and President Xi agreed to a trade deal, reducing U.S. tariffs on Chinese goods from approximately 57% to 47% [5] - China committed to resuming large-scale purchases of U.S. soybeans and delaying rare-earth export restrictions for one year [5] - This agreement provides a degree of stability for investors, particularly those with exposure to China and U.S. agricultural exports [6][7] Nuclear Sector Developments - The U.S. government plans to invest at least $80 billion in nuclear reactors to meet the energy demands of AI technologies [11] - The announcement led to significant gains in the uranium sector, with companies like Energy Fuels, Uranium Energy, and Cameco seeing stock increases of 9%, 14%, and 23% respectively [12] - China's nuclear ambitions are projected to consume one-third of global uranium supply by 2030, indicating a structural shift in the market [10][14] Private Credit Market Concerns - The private credit market has grown from around $300 billion in 2010 to approximately $3 trillion last year, raising concerns about potential debt issues [21] - Recent bankruptcies in the sector have prompted caution among investors, with JPMorgan's CEO warning of possible underlying problems [23][24] - Investors are advised to review their portfolios for exposure to private credit and assess the extent of lending operations in affected companies [25][26]

Market Overview - The US stock market faced pressure with all three major indices closing lower: Nasdaq down 1.57%, S&P 500 down 0.99%, and Dow Jones down 0.23% [1] - Technology stocks were the primary drag on the market, with Meta's stock dropping 11.33%, marking its largest decline in three years, and Microsoft's stock falling 2.92% due to investor concerns over rising expenditures in the AI sector [1] Semiconductor Sector - The semiconductor sector also experienced a downturn, with the Philadelphia Semiconductor Index falling 1.53%, where 22 out of 30 component stocks declined [2] - Notable declines included AMD down 3.59%, Broadcom down 2.46%, and Nvidia down 2%, with Nvidia's market capitalization dropping below $500 billion [2] Economic Concerns - There is ongoing debate regarding the US economic fundamentals and policy direction, with Goldman Sachs CEO David Solomon warning of "clearing" risks if economic growth does not accelerate amid rising debt levels [3] - Solomon emphasized that the core solution to the economic predicament lies in growth, despite a low probability of an imminent recession [3] Criticism of Federal Reserve - US Treasury Secretary Scott Bessenet criticized the Federal Reserve for its cautious stance and outdated practices, suggesting a need for comprehensive reform [4] - Bessenet expressed dissatisfaction with the Fed's inflation predictions and its GDP and inflation forecasts, which he deemed consistently inaccurate [4] Leadership Changes in Federal Reserve - Bessenet announced plans to conduct a second round of interviews for candidates to succeed Fed Chair Jerome Powell, aiming for a new leader who can reshape the Fed's internal processes and operations [5]

Meta and Microsoft's big AI spending plans have investors on edge, and both stocks are lower. Traders are starting to punish companies for capex spending is seen as a warning sign. Sign up for Business Insider's daily markets newsletter here. Mega-cap tech firms keep spending loads of cash on AI — and investors are starting to rebel. That was evident after Meta and Microsoft — two of the largest companies at the center of the AI revolution — saw their stock prices drop on Wednesday, after earnings ...

Market Overview - Major indices declined, with the Dow Jones down 109.88 points (0.23%) to 47,522.12, the Nasdaq down 377.33 points (1.57%) to 23,581.14, and the S&P 500 down 68.24 points (0.99%) to 6,822.35 [1] - Technology stocks and Bitcoin fell, while gold rose above $4,000 [1] Commodity Prices - Light crude oil futures for December rose by $0.09 to $60.57 per barrel (0.15% increase), while Brent crude oil futures increased by $0.08 to $65.00 per barrel (0.12% increase) [2] - Gold surged by 2.44% to $4,024.76, with Wells Fargo raising its 2026 gold price target from $3,900-$4,100 to $4,500-$4,700 per ounce [3] Economic Policy - The U.S. Senate voted 51-47 to terminate Trump's national emergency for global tariffs, with four Republican senators breaking ranks [4] - The Federal Reserve's Vice Chair for Supervision, Bowman, plans to reduce the bank regulatory department's staff by 30% by 2026, aligning with broader regulatory rollbacks [5] Corporate News - Amazon's Q3 earnings exceeded expectations, with EPS at $1.95 (above the $1.57 forecast) and revenue at $180.2 billion (surpassing the $177.9 billion estimate), leading to an 11% after-hours stock increase [8] - Apple's Q4 revenue reached $102.47 billion, exceeding expectations, with strong demand for the iPhone 17 series, despite initial supply constraints [8] - Nvidia plans to invest up to $1 billion in AI startup Poolside, potentially quadrupling its valuation [9] - Meta's bond issuance received a record $125 billion in subscriptions, reflecting strong market demand for corporate bonds in the AI sector [10] - Tesla's Cybertruck has faced its tenth recall, involving 6,197 vehicles due to potential installation issues with off-road light bars [11]

Group 1: Economic Indicators - China's official composite PMI data for October is set to be released [3] - Eurozone's core harmonized CPI for October is also scheduled for publication [3] - The US core PCE price index for September will be announced [3] Group 2: Market Performance - US stock indices closed lower, with the Nasdaq down 1.57%, S&P 500 down 0.99%, and Dow Jones down 0.23% [4] - Meta Platforms saw a significant drop of over 11%, marking its largest single-day decline in three years, resulting in a market cap loss of approximately $214 billion [4] - International oil prices experienced slight declines, with WTI crude oil down 0.31% to $60.29 per barrel and Brent crude down 0.42% to $64.05 per barrel [6] Group 3: Corporate Developments - Agricultural Bank of China reported a net profit of 222.3 billion yuan for the first three quarters of the year, a year-on-year increase of 3.28% [23] - Apple Inc. reported Q4 revenue of $102.47 billion, a year-on-year increase of 7.9%, with net profit reaching $27.47 billion [24] - Amazon's Q3 net sales were $180.17 billion, exceeding expectations, with a net profit of $21.19 billion [25] Group 4: Regulatory and Policy Updates - China's Ministry of Commerce announced plans to accelerate the development of green and low-carbon logistics [9] - The Chinese government will implement a new policy for duty-free shops starting November 1, 2025, aimed at boosting consumption [10] - The Financial Regulatory Bureau has expanded the pilot areas for pension financial products to nationwide, with a trial period extended to three years [12] Group 5: Industry Trends - OpenAI announced plans for the "Stargate" data center project in Michigan, with a planned capacity exceeding 8 GW and an investment of over $450 billion in the next three years [31] - YouTube is undergoing a restructuring focused on artificial intelligence applications, indicating a shift towards AI-driven products [26] - WeChat has launched three new features aimed at enhancing user experience, including bulk message recall and selective notification settings [28]

OpenAI is preparing to file for an initial public offering as soon as next year that could give it a market cap of $1 trillion. That's according to Reuters. An OpenAI spokesperson didn't return my request for comment on this one.I want to put some context on this though. Uh Open Eye is the world's most valuable private company. As you can see, courtesy of Yahoo Finance's private markets data.While $1 trillion would be a huge valuation, keep in mind video on Wednesday eclipsed a $5 trillion market cap for th ...