Stocks Rise in Countdown to Tech Earnings and Fed: The Market Is Holding Its Breath

 

Stocks Rise in Countdown to Tech Earnings and Fed: The Market Is Holding Its Breath

**By [moonlight editory tesam] | October 26, 2026 | 12-Minute Read**

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## The Short Version (For the Busy American)

Wall Street opened the week with a cautious sigh of relief, and you can feel the tension in every tick.

U.S. stock futures climbed Monday morning, with **S&P 500 futures up 0.34%, Nasdaq 100 futures up 0.6%, and Dow futures gaining roughly 180 to 200 points** . The catalyst wasn't a breakthrough in AI or a surprise earnings beat. It was something simpler: **oil prices pulled back** from last week's six-month highs, and investors are positioning themselves for the two biggest events of the quarter.

**First**, a deluge of tech earnings. Roughly **36% of the S&P 500—179 companies—report this week**, including the trillion-dollar hyperscalers: **Alphabet and Microsoft on Wednesday, Amazon on Thursday** . Their combined market value is approaching **$11 trillion**, and their capex guidance will determine whether the AI trade stabilizes or cracks further .

**Second**, the Federal Reserve meets Tuesday and Wednesday. Markets price a **90% probability of a pause** at 3.75%-4.00%, but a **December hike is now seen as nearly certain** .

**The punchline:** This isn't a rally of conviction. It's a rally of relief—a market holding its breath before the earnings and the Fed tell it what happens next.

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## What's Actually Moving the Market

Let me walk you through the forces at play, because the surface calm hides real anxiety.

### The Oil Retreat

Brent crude, which spiked above **$116** last week on fears of renewed U.S. strikes on Iran, pulled back toward **$115** Monday morning . The retreat eased immediate inflation fears and gave equities room to breathe.

But the relief is fragile. The U.S. and Israel reportedly have plans for renewed strikes on Iran **after the November 3 midterms** . Any escalation could send oil right back up—and drag stocks down with it.

### The Meta Precedent

Last week, Meta delivered the warning shot that every tech investor is now obsessing over.

Meta beat revenue expectations, but its **free cash flow turned negative** for the first time since its IPO. Capital expenditures hit **$34.9 billion in a single quarter**. The stock was punished. Its credit default swaps—the cost of insuring against default—hit a record high .

The message was unmistakable: **investors are no longer giving tech giants a blank check for AI spending**. As Gabelli Funds' John Belton put it: *"Investors currently have absolutely no patience for increases in capital spending"* .

That's the bar Alphabet, Microsoft, and Amazon now have to clear.

### The Neocloud Warning

Adding to the anxiety, Elon Musk posted on X that debt markets have **"almost entirely shut off access to money"** for companies without substantial revenue outside AI data centers. He predicted the **200+ neoclouds**—companies like CoreWeave that rent out GPU capacity—will face **"guppy-level death and consolidation"** .

CoreWeave fell **3.9%** in premarket trading. Nebius dropped **1.7%**. The AI infrastructure trade is cracking, and Musk just poured gasoline on the fire.

### The Anthropic Filing

The one bright spot: **Anthropic publicly filed its S-1** for its blockbuster IPO, drawing investor attention back to the AI trade's biggest names . The filing confirmed the company's explosive revenue growth—and its staggering cash burn. It's a reminder that the AI revolution is real, even if the financing is getting harder.

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## The Human Touch: What This Week Means for Your Money

Let me put this in terms that actually connect to your life.

### Your 401(k) Is on the Line This Week

If you own an S&P 500 index fund, you own Alphabet, Microsoft, and Amazon. You also own Meta, Nvidia, and every chip stock that's been volatile for weeks. **This week's earnings will determine whether your retirement account recovers or slides further**.

The S&P 500 is still up **11.4% year-to-date**, but it's down **1.6% over the past month** . The easy money has been made. The next move depends on whether the hyperscalers can prove their AI spending is generating returns—not just costs.

### The Fed and Your Mortgage

The Fed will almost certainly hold rates steady on Wednesday. But that doesn't mean relief for borrowers.

Markets now price a **67.5% chance of a December hike** . A Reuters poll of 100 economists found that **all 100 expect a rate hike by year-end** . The pause is a breather, not a pivot.

For anyone with a variable-rate loan, a credit card balance, or a mortgage application in progress, the direction of travel is still **higher for longer**.

### The Jobs and Inflation Tension

Here's the uncomfortable backdrop. Inflation is running at **3.7%** annually. Consumer sentiment is at a **five-month low**, with **56% of Americans saying high prices are dragging down their personal finances** .

The Fed is trying to fight inflation without crashing the economy. The market is trying to price AI growth without ignoring the cost. And American families are caught in the middle, paying more for gas, groceries, and mortgages while waiting for relief that keeps getting pushed further away.

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## Frequently Asked Questions

### Why are stocks rising on Monday?

Two reasons. **Oil prices pulled back** from last week's six-month highs, easing inflation fears. And investors are **positioning ahead of a huge week of tech earnings and the Fed decision**, hoping the hyperscalers will deliver strong results and the Fed will signal a measured path .

### What earnings are due this week?

**Alphabet and Microsoft report Wednesday after the close. Amazon reports Thursday.** Intel, Eli Lilly, Exxon Mobil, and Caterpillar also report, giving a broader read on the economy . Roughly **179 S&P 500 companies**—about 36% of the index—report this week .

### Why is Meta's earnings report so important for this week?

Meta was the **warning shot**. It beat revenue but posted **negative free cash flow** and soaring capex. The stock was punished, and its credit risk hit a record. Investors now expect Alphabet, Microsoft, and Amazon to show that their AI spending is generating **returns, not just costs**. Any sign of runaway capex without accelerating cloud revenue could trigger another selloff .

### What will the Fed do on Wednesday?

**Hold rates steady** at 3.75%-4.00%. Markets price a **90% probability of a pause**. But the focus is on Chair Kevin Warsh's press conference—whether he signals that December is still a live meeting for a hike .

### Will the Fed hike in December?

**Almost certainly.** Markets price a **67.5% chance of a December hike**. A Reuters poll of 100 economists found **unanimous** expectations of a hike by year-end . PIMCO expects a 25-basis-point hike in December and sees the September hike and the coming moves as a **"recalibration"** rather than the start of a new cycle .

### What did Musk say about neoclouds?

Musk posted on X that debt markets have **"almost entirely shut off access to money"** for companies without substantial revenue outside AI data centers. He predicted the **200+ neoclouds** will face **"guppy-level death and consolidation"**, with only a few surviving. He also said SpaceX won't acquire any neoclouds, calling it "pointless" .

### What is Anthropic's IPO filing?

Anthropic publicly filed its **S-1** on Monday, setting up a mid-November IPO. The filing revealed explosive revenue growth (**$16.8 billion in Q3**) but also massive cash burn and **$450 billion in future cloud commitments**. It's the biggest test yet of public market appetite for a frontier AI lab .

### Should I buy the dip in tech stocks?

I can't give personalized investment advice. What I can tell you is that **this week's earnings will be decisive**. If Alphabet, Microsoft, and Amazon show strong cloud growth and disciplined capex, the AI trade could stabilize. If they disappoint, the selloff could accelerate. The Fed's signal on Wednesday adds another layer of uncertainty.

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## The Path Forward: What to Watch

### Wednesday: Alphabet and Microsoft Earnings

The two hyperscalers report after the close. Watch **cloud revenue growth** and **capex guidance**. If cloud growth accelerates enough to justify the spending, the AI trade breathes. If not, expect another leg down .

### Wednesday: The Fed Decision (2:00 PM ET)

The hold is priced in. The statement and Warsh's press conference are the main events. Watch for **dissent votes**—Cleveland Fed's Beth Hammack may vote for a hike—and any signal about December .

### Thursday: Amazon Earnings and GDP

Amazon reports after the close. The government also releases **Q3 GDP** (expected 3.2% growth) and the **PCE inflation index**—the Fed's preferred gauge—on Thursday . If inflation is hot, the December hike becomes even more certain.

### The Midterms (November 3)

One week away. Affordability is the top issue, and the election outcome will shape fiscal policy, trade, and the trajectory of the Iran war—all of which affect markets .

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## Conclusion: The Calm Before the Storm

Here's what I want you to take away from Monday's cautious rally.

The market is **holding its breath**. Oil pulled back. Futures are up. The panic of last week feels a little less acute.

But nothing has been resolved. Meta already showed that even strong revenue can't protect you if your cash flow turns negative. Musk just warned that the neoclouds are about to be wiped out. And the Fed is about to speak, with a December hike looming.

This week will tell us whether the AI trade can stabilize or whether the cracks that appeared in October widen into something worse. Alphabet, Microsoft, and Amazon have the power to calm the market—or confirm its fears.

The countdown is on.

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## Disclaimer

This article is for informational purposes only and does not constitute financial advice, investment advice, or a recommendation to buy or sell any securities. The author is not a licensed financial advisor. All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Readers should conduct their own research and consult with a qualified financial professional before making any investment decisions. Data and figures cited are accurate as of the date of publication but may change. The author holds no position in any securities mentioned.

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