North American Morning Briefing: AI Stocks Fall After Alphabet Earnings Disappoint

Stock futures were mixed as investors were digesting a host of earnings

results from Big Tech.

Futures on the Nasdaq-100 were down about 1% after Alphabet's latest earnings disappointed investors.

"Investors remain willing to reward companies demonstrating clear AI-driven revenue momentum, but they're becoming increasingly unforgiving when spending, margins and cash generation fall short of expectations," said Pepperstone.

Following the Federal Reserve decision to hold interest rates steady Wednesday, data expected on Thursday including third-quarter GDP, PCE inflation and weekly jobless claims are expected to provide important signals.

In the eurozone, the European Central Bank is expected to stay on hold on Thursday, while a hike in December is priced with a 65% probability, according to LSEG.

Meanwhile, oil prices fell amid renewed U.S. efforts to revive peace negotiations with Iran.

"A credible agreement involving Iran could reduce Brent's geopolitical premium, particularly if shipping conditions improve and additional crude supplies become available," said Zaye Capital Markets.

Later today, investors will be watching out for Amazon and Intel quarterly earnings, both scheduled after the closing bell. Results from Eli Lilly, Mastercard and Merck are all due for before the open.

Watch For:

U.S. 3Q GDP First Estimate; U.S. Personal Income and Outlays for September; U.S. Weekly Jobless Claims; Amazon.com 3Q earnings; Caterpillar 3Q earnings; Intel 3Q earnings; MasterCard 3Q earnings; Merck 3Q earnings; Mondelez International 3Q earnings; Starbucks 4Q earnings

Today's Top Headlines/Must Reads:

- The Beleaguered Chip Sellers Getting Their Revenge on Apple - Alphabet Still Has the Ingredients to Win in an AI Pullback - Tech Giants Ramp Up Resistance to ICE in Bid to Avoid Democratic Scrutiny

MARKET WRAPS Forex: The dollar edged higher as investors digested Wednesday's Fed interest rate decision.

The euro fell ahead of the European Central Bank's policy decision later in the day.

Bonds:

Treasury yields dropped. In response to Fed Chairman Kevin Warsh's press conference, bond yields moved mixed, with the two-year yield falling and the 10-year yield rising.

"Warsh's refusal to give forward guidance risks being self-defeating: the market-driven restraint he's counting on eased as the front end rallied," said Thornburg Investment Management. Energy:

Oil prices fell as traders assessed fresh U.S. efforts to revive peace negotiations with Iran against persistent Middle East supply risks and the possibility of renewed military escalation. Metals:

Gold prices fall in early trading as investors digest the Federal Reserve's policy meeting while waiting for the release of U.S. inflation data later on Thursday.

The precious metal could trade around $5,000 to $5,500 next year Saxo said. In the longer term, gold could rise even higher as central banks haven't finished accumulating the precious metal, which will take some time.

Copper

Copper price may continue to benefit from China's AI development, according to BofA Securities. Copper use in China data centers is likely to rise as China continues to increase investment in artificial intelligence.

TODAY'S TOP HEADLINES

Shell to Launch $5 Billion Share Buyback After Earnings Soar

Shell hiked its quarterly share buyback to $5 billion after earnings doubled and cash flow soared, driven by elevated oil and gas prices caused by the Middle East conflict and exceptional refining margins amid a historic fuel squeeze.

The British energy major's third-quarter adjusted earnings-a closely watched metric that strips out certain commodity price adjustments and one-time charges-nearly doubled to $10.81 billion from the $5.43 billion it reported in the same period last year. Analysts had expected $10.33 billion, according to estimates compiled by Vara Research.

Samsung's Chip Profit Drives Another Record Quarter

Samsung Electronics reported its fourth consecutive quarter of record earnings as its core semiconductor business continued to ride the AI-driven demand wave, though the results fell short of lofty expectations amid growing calls for higher shareholder returns.

The South Korean company's quarterly operating profit topped 100 trillion won, equivalent to $74.52 billion, making it the first major global technology company to cross that threshold. It also reiterated that tight memory supply is expected to continue for the next few years, keeping chip prices elevated.

Coinbase Global Earnings Will Show Whether It's Still Under Crypto's Thumb

Coinbase Global has said for years that it is seeking to become less dependent on crypto trading for profits. The company's third-quarter earnings report will give investors a chance to see whether that ambition is anywhere close to being realized.

Analysts expect the crypto firm to report a loss of 23 cents per share and $1.21 billion in revenue for the period when it reports after the close on Thursday, according to FactSet. That compares to a $1.50 per-share profit and revenue of $1.87 billion in the third quarter of 2025.

Haleon Shares Dive After Advil Maker Cuts Guidance

Advil maker Haleon's shares dove after the company cut its outlook for the year and weak sales for cough medications weighed on results.

The company, which spun out of pharmaceutical group GSK in 2022, said it now expects full-year organic revenue growth around 2.5%. Haleon at its half-year results in July said it expected organic revenue growth of 3% to 5%.

Oil Prices Fall as Traders Weigh U.S.-Iran Diplomacy

Oil prices fell Thursday as traders assessed fresh U.S. efforts to revive peace negotiations with Iran against persistent Middle East supply risks and the possibility of renewed military escalation.

December Brent crude futures fell 1.1% to $114.02 a barrel, while December West Texas Intermediate futures dropped 1.4% to $101.37 a barrel.

The Fed Held Steady on Rates, Leaving Investors to Sit Tight, Too

The Federal Reserve is in a holding pattern. And so are markets.

U.S. stocks and longer-term bond yields ticked higher after the Fed held interest rates steady as expected and Fed Chairman Kevin Warsh made comments that investors interpreted as slightly dovish-indicating that the central bank likely won't embark on a rapid series of rate increases in the coming months.

The Fed's AI Puzzle: Will High Rates Slow the Boom?

For months, a common view of the artificial-intelligence boom has been that it is propping up the U.S. economy and it is too big and too flush with cash to care about interest rates. Federal Reserve Chairman Kevin Warsh said Wednesday he wasn't so sure about either assumption.

The positions complicate the question of how much higher interest rates may have to go because they could point in opposite directions. The Fed held rates steady Wednesday, as anticipated, with investors widely expecting an increase at the next meeting in December.

RBA's Blunt Messaging Raises Questions About Peak in Rates

SYDNEY-The Reserve Bank of Australia's recent strategy of blunt and frequent communication has left financial markets all but certain that it will raise interest rates for a fifth time this year at its policy meeting next week.

So pointed has the commentary been from the RBA's top ranks that the question of whether the bank might need to keep tightening in December or next year remains a live one.

See the Trump Administration Stock Portfolio That Spans More Than 40 Companies

A slew of quantum-computing investments. A 35% stake in a firm vying for Venezuelan oil. Four equity deals in semiconductors and energy announced last week.

The Trump administration is snapping up stakes in private companies at an unprecedented pace. Since the start of President Trump's second term, the U.S. government has announced 43 deals involving stock ownership or warrants that may be swapped for equity at a later date.

The Hispanic Voters Who Turned on Trump and Put Texas in Play

WESLACO, Texas-Abad Morales, who owns a construction company here in South Texas, was swayed by President Trump's 2024 campaign question: "Are you better off today than you were four years ago?"

Two years later, he is asking himself the same question-and now, he says, life has only gotten worse.

U.S. Expels Cuban Diplomat After Extraordinary U.N. Verbal Clash

The U.S. expelled a Cuban diplomat after the island country's foreign minister loudly interrupted an address by U.S. Ambassador to the United Nations Mike Waltz criticizing Havana's leadership, and the two shouted at one another in an extraordinary exchange at the world body's famous rostrum.

The heated ​words and a battle over a cellphone unfolded Tuesday on the U.N. General Assembly floor during an annual debate about the U.S. economic embargo of Cuba, as Waltz laid out familiar American allegations that the Havana regime has enriched itself as it impoverished the population.

Latin America's Right-Wing Surge Suddenly Seems Vulnerable

SÃO PAULO-A right-wing surge that swept through election after election in Latin America has hit a wall in Brazil.

Leftist President Luiz Inácio Lula da Silva's upset victory Sunday broke a string of seven consecutive right-wing presidential victories that began in April 2025. From Honduras to Chile, Bolivia to Colombia, voters frustrated by crime, corruption and economic stagnation turned to conservatives who made hard-line promises to restore order, revive growth and align with President Trump.

Write to priscila.barrera@wsj.com

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October 29, 2026 06:19 ET (10:19 GMT)