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The quarter sets Cloud strength against core advertising weakness, and the search miss is likely to dominate the initial reaction. Search remains the profit engine funding Alphabet’s AI build-out. Capex came in about $4.4 billion below forecast, after Microsoft also underspent earlier in the evening, so traders may question the near-term pace of hyperscaler orders for AI chips and data centre equipment. The equity securities loss inflates the headline EPS decline, so expect focus on underlying operating performance, where the miss is smaller but still present.

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Earlier:

• Microsoft Q1 beats as Azure grows 48% and capex lands $6bn below forecast

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Google Cloud doubled and beat, but the advertising businesses that pay for Alphabet’s AI…

For oil, the report adds a two-way risk ahead of next week’s midterms. A credible negotiating channel offers the first sign in months that Hormuz shipping could eventually be unlocked, which would ease the supply premium. But the contacts cover only a framework, and Trump continues to signal strikes. That leaves the market exposed to a sharp upside move if talks fail and an attack follows. Rezaei’s recent threats against the UAE add another layer of Gulf supply risk, so traders are likely to keep paying for protection until there is clarity on Trump’s decision.

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Washington is talking to Tehran’s hard-liners in private while threatening war in public, and the oil market has to price both.

Summary:

• Vance sent a letter to Mohsen Rezaei,…

• Vance writes to Iran hard-liner Rezaei to revive talks as Trump weighs new strikes
• Alphabet Q3: Google Cloud revenue jumps 103% but search and ad sales miss forecasts
• Microsoft Q1 beats as Azure grows 48% and capex lands $6bn below forecast
• The before and after. A look at the changes in forex, rates, stocks through the FOMC decision and press conference.
• Fed Chairman Kevin Warsh: More information will help determine appropriate policy steps
• The full statement from the October 2026 FOMC rate decision
• FOMC decision Oct 28: Rates left unchanged
• Iran's Araghchi: Iran continues to give diplomacy a chance to succeed
• Crude oil extends to a session high of $103.53 as Iran concerns keep buyers in control
• BOC's Macklem: Our surveys show businesses are…

So what happened from right before the decision to the end of the Fed Warsh press conference at 3:04 PM ET.  The before-and-after comparison shows a clear reaction:

1. The USD fell against every currency shown,
2. Shorter-term Treasury yields declined, longer-term yields rose. The yield curve steepened, and
3. Stocks were mixed.

These changes cover the decision and press conference together.

Treasury yields: A pronounced steepening of the curve. 

• 2-year: 4.7702% → 4.7182%, down 5.20 basis points.
• 5-year: 4.8764% → 4.8657%, down 1.07 basis points.
• 10-year: 5.0196% → 5.0466%, up 2.70 basis points.
• 30-year: 5.3178% → 5.3707%, up 5.29 basis points.

The 2-year/10-year spread widened from 24.94 to 32.84 basis points, a steepening of 7.90 basis points.

My…

Lower tier data only on the agenda for the session ahead. 

There are much-awiated earnings releases after the US RTH close, MSFT and Alphabet. (GOOGL)

This article was written by Eamonn Sheridan at investinglive.com.

The full statement from the October 2026 rate decision: 

The Federal Open Market Committee approved the following statement for release by a 10 – 2 vote:

The Committee decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.

Economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated. The…

Axios' Barak Ravid is out with a new report:

• Mediators led by Qatar are trying to restart negotiations after the midterms
• Qataris working to convince Iran to allow nuclear inspectors in return for some sanctions relief
• Trump says "we need to finish the jobs through a deal or another way"

The report says "A renewed bombing offensive appears likely shortly after the midterms without a last-minute deal", so this is framed as a last-ditch effort. I'd estimate that strikes are 85% priced in. The White House is telegraphing a short campaign, though how Iran responds might dictate what happens next. In addition, their reaction could come down to where and what the US strikes.

The report says "an operation is expected to include a week of massive…

• Q3 GDP likely above 3%, led by healthy consumer spending
• Business likely rising at about a double digit pace
• Capex is historically high
• Employment conditions are positive
• The committee believes more information will help determine appropriate policy steps
• Credit conditions have tightened for some households and businesses
• I'm unwilling and unable to call financial conditions tight
• Inflation is too high
• Energy and related prices have moved higher again in recent weeks
• Our job is to make sure inflation doesn't broaden out
• We have shown our readiness to act
• In 2027, will have 8 meetings but one meeting will not have a vote.
• In 2028, will have 8 meetings but two won't have a vote
• Change will allow a focus on longer-term deliberations

This sounds like a…

Microsoft, and Alphabet report after today’s close, with investors looking for solid revenue growth and evidence that spending on artificial intelligence is translating into stronger business performance.

Microsoft (MSFT) is expected to report earnings of $4.72 per share, up 14.3% from $4.13 a year ago. Revenue is forecast at $90.62 billion, up 16.7% from $77.67 billion. Azure growth, capital spending and the outlook for margins will be key areas of focus.

Alphabet (GOOGL/GOOG) is expected to earn $3.03 per share, up 5.6% from $2.87 last year. Revenue is projected at $127.91 billion, up 25.0% from $102.35 billion. Investors will watch Google Cloud growth, the performance of the advertising business and how rising AI investment affects free…

The market flirted with pricing in an October rate hike for weeks but with little guidance from Chairman Kevin Warsh, the market ultimately tilted towards pricing in no move, with just a 7% chance at the time of the decision.

Ahead of the decision, here is how markets looked:

• S&P 500 up 14 points
• US 2-year yields up 2.7 bps to 4.75%
• WTI crude oil up $2.94 to $102.82
• USD/JPY up 30 pips to 158.23

Notable was back in the July decision when it was a 9-3 vote to hold rates with Hammack, Kashkari and Logan all voting to hike. The September rate hike was the first one of the cycle and the market is pricing in about 79 bps of hikes in the year ahead.

This article was written by Adam Button at investinglive.com.

It's always a good idea to re-read the prior FOMC statement before the new one is published. Don't expect the Warsh Fed to offer much in the way of guidance.

The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote: The Committee decided to raise the target range for the federal funds rate by 1/4 percentage pointto 3-3/4to 4 percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system. Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments,domestic spending has been resilient. Productivity growth is strong, and capital investment is robust.…

The AUDUSD got a lift in Asian trading as Australia’s inflation data and hawkish comments from RBA Governor Michele Bullock gave buyers a reason to push higher. September headline inflation rose to 4.3% from 4.0%, while Bullock warned that inflation was likely to run above the RBA’s August forecasts. The combination kept the prospect of another rate hike firmly in play.

The AUDUSD initiallly moved to the upside on the fundamental news. However after reaching a key technical MA target, the momentum higher reversed back lower and toward a downside MA target.  That has helped set the guardrails for traders from a technical perspective. In the video above, I show the key levels in play and explain why.  

What is the price action and technical…