Capital spending is a notable figure in Big Tech’s profits

News comes fast and thick. Secure with straps.

First is the interest rate.

As traders expected, the US Federal Reserve cut interest rates by 25 basis points. But Powell warned that another rate cut in December, which the market had priced in with more than 90% certainty, was “not a foregone conclusion.”

His comments poured cold water on the market, causing most stocks to fall and Treasury yields to rise.

Next is Big Tech’s profits.

Alphabet, Meta, and Microsoft reported higher revenue and bottom line profits than analysts expected. Notably, Alphabet’s quarterly revenue exceeded $100 billion for the first time.

And finally, there is capital investment.

What really matters here is capital investment. alphabet, Meta and microsoft They say they’re going to spend more money.

Alphabet has not only raised its fiscal year 2025 capital spending forecast to a “range of $91 billion to $93 billion,” from its previous forecast of $75 billion to $85 billion, but also expects capital spending to increase “significantly” in 2026, according to finance chief Anat Ashkenazi.

Meta raised the lower end of its capital spending forecast for this year from $66 billion to $70 billion. “The fact that we’re able to make a significantly larger investment here is very likely to be profitable,” CEO Mark Zuckerberg said on an earnings call.

Microsoft Chief Financial Officer Amy Hood also said the company’s fiscal first quarter capital spending was $34.9 billion, higher than the $30 billion estimated in July. Hood added that the growth rate of capital spending in 2026 will also be higher than the growth rate in 2025.

Importantly, spending on artificial intelligence will not slow down, at least not until next year, thanks to the growing demand for AI services. Concerns about a bubble can be put off for now.

That’s all for today. At least until the headlines for the meeting between US President Donald Trump and China’s Xi Jinping come out later in the day, we can all catch our breath.

Trump-Xi meeting approaches with high stakes and expectations, but few details

A high-stakes meeting between US President Donald Trump and Chinese President Xi Jinping could lead to a breakthrough in trade relations between the two economic superpowers.

But while the Trump administration and Beijing have both expressed optimism ahead of the sit-in, details of the summit remain murky and some experts are skeptical of the White House’s confidence in achieving a positive outcome.

— Kevin Breuninger