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Good morning investors! The market was choppy yesterday and earnings didn’t help.
Today we cover:
Fed cuts rates
Big tech reports
More major earnings (Boeing, Starbucks, etc.)
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📊 Economy and News
Fed Cuts Rates, Signals Pause on Future Reductions
The Federal Reserve cut interest rates by 25 basis points to a 3.75%-4% range, marking its second reduction this year.
Fed Chair Jerome Powell cautioned that a December rate cut is not guaranteed, citing differing views among Fed members. Two policymakers dissented: one pushed for a larger cut, while another preferred no change due to persistent inflation.
The Fed also plans to halt its balance sheet reduction by December, signaling the end of quantitative tightening. The dollar rose as expectations for a December cut fell from 85% to 62%.
Global hits:
Bank of Canada cuts benchmark rate to 2.25% while signaling an end to cuts for the year.
US government shutdown may prompt first-ever workaround for inflation-protected bonds.
Germany to lift hourly minimum wage to 14.60 euros from 2027.
U.S. Pending Home Sales Stall in September Amid Economic Uncertainty
Pending U.S. home sales remained flat in September, despite falling mortgage rates, as labor market concerns and economic uncertainty deterred buyers. This followed a revised 4.2% rise in August. Economists had expected a 1.0% increase. Sales dropped 0.9% year-over-year.
Elsewhere, 30-year fixed mortgage rates fell to 6.30% from 6.56%. Refinancing surged 9%, while purchase loans rose 5%.
A 29-day government shutdown further strained the housing market, delaying data releases and disrupting mortgage assistance programs, with applications dropping over 26%. Insurance issues in flood-prone areas also risked delaying home closings.
Regionally, contracts fell 3.4% in the Midwest and 0.2% in the West but rose 1.1% in the South and 3.1% in the Northeast. Economists predict a sustained housing recovery remains unlikely soon due to affordability challenges and economic headwinds.
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📈 Stocks
S&P 500 6,890.59 (-0.004%)
DJIA 47,632 (-0.16%)
NASDAQ 23,958.47 (+0.55%)
BRENT CRUDE 13 (+0.52%)
* Prices as of Oct 30th, 12:20 AM UTC
Big Tech Reports
Google: Alphabet beat Wall Street’s expectations, reporting revenue of $102.35 billion vs. $99.89 billion adj. estimated. The company said it will increase its capital expenditures to a range of $91 billion to $93 billion for the 2025 year. The company’s cloud unit, which houses its AI services, showed solid growth and a backlog of customers.
The latest earnings show the company is seeing rising demand for AI services, which largely sit in its cloud unit. It also shows the company is spending more to try and build out more infrastructure to accomodate the backlog of customer requests.
Google’s search business generated $56.56 billion in revenue — up 15% from the prior year.YouTube advertising revenue came in at $10.26 billion, higher than Wall Street expected. Alphabet reported overall advertising revenue of $74.18 billion — up from $65.85 billion last year.
Other Bets, which includes the company’s life sciences unit Verily and self-driving car unit Waymo, reported revenue of $344 million during the quarter. That’s lower than the $388 million from the same quarter last year.
Alphabet reported a loss of $1.42 billion on other bets, compared to a loss of $1.12 billion the year before.
Facebook: Meta shares dropped 9% after the company reported third-quarter earnings that beat on sales but missed some.
Meta said that the implementation of President Donald Trump’s One Big Beautiful Bill Act resulted in a one-time, non-cash income tax charge of $15.93 billion. The company said it expects the act to result in “a significant reduction” in its U.S. federal cash tax payments for the rest of 2025 and future years.
Meta raised the low end of its total expenses for the year by $2 billion, saying expenses will come in between $116 billion to $118 billion. That figure was previously $114 billion to $118 billion.
The social media company’s third-quarter sales rose 26% year-over-year, which is its highest revenue growth since the first quarter of 2024.
Meta’s Reality Labs hardware unit reported a third-quarter loss of $4.4 billion on $470 million in sales.
The company said that it saw 3.54 billion daily active people across its apps for the quarter, ahead of Wall Street’s expectations of 3.5 billion daily active people.
Meta’s advertising sales were $50.08 billion during the third quarter, ahead of Wall Street’s expectations of $48.5 billion.
Microsoft: Microsoft beat on earnings and revenue for the fiscal first quarter. The company said revenue in fiscal 2025 from Azure and other cloud services jumped 34% from the prior year to more than $75 billion.
Microsoft’s Intelligent Cloud unit, which includes Azure, reported $30.9 billion in revenue, up 28% from a year ago and above the StreetAccount consensus of $30.25 billion. Growth in Azure, which competes with Amazon Web Services and Google Cloud, also beat estimates.
Microsoft said its investment in OpenAI resulted in a $3.1 billion hit to net income in the quarter, equivalent to 41 cents per share.
Microsoft’s Productivity and Business Processes segment, which is home to Office productivity software and LinkedIn, delivered $33 billion in revenue for the first quarter, above the $32.33 billion consensus among analysts.
The More Personal Computing unit, which includes Windows, search advertising, devices and video games, reported 4% growth to $13.8 billion in revenue. That was above StreetAccount’s $12.83 billion consensus.
Microsoft’s earnings landed hours after the company experienced an outage in Azure and its 365 services. Various websites and games were down for hours.
Don’t forget: Eli Lilly, Walmart to offer first retail pickup option for discounted vials of weight loss drug Zepbound.
World’s largest sovereign wealth fund returns 5.8% amid AI optimism.
Government shutdown could cost U.S. economy up to $14 billion.
More earnings:
Starbucks reported weaker-than-expected quarterly earnings, but the company saw same-store sales grow for the first time in nearly two years. Its U.S. same-store sales were flat for the quarter but turned positive in September. CEO Brian Niccol is carrying out a turnaround strategy after struggles in the company’s two biggest markets, the U.S. and China.
Chipotle met Wall Street’s quarterly earnings expectations but missed revenue estimates, as traffic dropped again. It now expects full-year same-store sales to fall by a low-single digit percentage.
ServiceNow topped third-quarter estimates and lifted its guidance as it benefits from the AI boom. The enterprise software firm also authorized a 5-for-1 stock split to make shares more accessible to retail investors. Finance chief Gina Mastantuono told CNBC that the annual contract value for ServiceNow’s AI platform is projected to surpass $500 million this year and is on track to meet its 2026 year-end goal of $1 billion.
Boeing incurred an adjusted loss of $7.47 per share in the third quarter of 2025, wider than the Zacks Consensus Estimate of a loss of $3.68. The bottom line improved from the year-ago quarter’s reported loss of $10.44 per share. Including one-time items, the company reported a GAAP loss of $7.14 per share, narrower than the year-ago quarter’s reported loss of $9.97 per share. Also, it delayed 777X’s first delivery to 2027 and took a ~$5 billion charge, bringing total program charges above $15 billion; shares fell as investors weighed certification and supply-chain risks against a return to positive free cash flow.
Fiserv shares sank roughly 42% after a revenue/EPS miss, a cut to full-year growth targets, and a leadership overhaul that elevated a new CFO and co-presidents.
UBS said third-quarter net profit surged 74%, comfortably beating expectations as revenue shot higher on financial market volatility caused by global tariff turmoil, as well as renewed M&A activity. Switzerland’s largest bank also said it was confident in its plans for $3 billion in share buybacks this year and its financial targets for 2026.
Adidas’ group sales dipped 5% in North America in the third quarter, weighed down by the end of the popular Yeezy sneaker line last year and a volatile global environment affected by US tariffs. Global revenues, meanwhile, grew 3% to hit 6.63 billion euros ($7.73 billion) – a record. Sales excluding Yeezy rose 8% in currency-neutral terms in North America in the quarter, slower growth than in Europe and Asia, indicating a weaker US consumer. Overall sales excluding Yeezy were up 12% in currency-neutral terms. Adidas hiked its annual profit outlook last week, saying it successfully offset part of the extra costs caused by higher US tariffs.
Check here: Paramount to lay off 1,000 employees, with more cuts expected.
Nvidia becomes first company to reach $5 trillion valuation.
Lastly, Adobe and YouTube announced a partnership designed to empower creators around the globe. Also, Adobe launches AI Assistant in Express for conversational design. Still, the stock had a bad day.
💵 Personal Finance
SNAP Funding Lapse Threatens Consumers and Retailers
A potential lapse in SNAP funding due to the ongoing U.S. government shutdown, now in its 29th day, could disrupt food aid for nearly 42 million Americans starting November 1, 2025.
This would severely impact low-income households, forcing reliance on food banks and reducing grocery spending, which averages $832 monthly for SNAP users, 20% more than non-SNAP shoppers.
Retailers like Walmart, Dollar General, and Kroger, heavily reliant on SNAP spending, face sales declines, potential theft increases, and supply chain strains.
Walmart captures 26% of SNAP grocery spending, followed by Kroger and Costco. The lapse could also curb discretionary spending, affecting broader retail. States like New York are planning aid, and missed benefits may be paid later, but the immediate economic ripple effects remain significant.
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👩🏽⚖️ Legal Stuff
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