The Week Ahead: Fed Rate Decision Looming as Microsoft, Alphabet, and Amazon Report Earnings

TradingKey - During the week of October 26 to 30 Eastern Time, the US stock market will face key events including the Federal Reserve's October FOMC meeting, the preliminary estimate of US third-quarter Gross Domestic Product (GDP), and the September Personal Income and Outlays report.

In September, the Federal Reserve raised the target range for the federal funds rate by 25 basis points to 3.75%-4.00%. As of October 22, the CME FedWatch Tool showed that the market estimated an approximately 90.6% probability that the Fed would keep interest rates unchanged at its October meeting.

As these probabilities fluctuate with changes in federal funds futures prices, investors still need to pay close attention to policy signals delivered in the monetary policy statement and press conference.

Meanwhile, the US third-quarter earnings season enters a peak phase. Alphabet (GOOGL) and Microsoft (MSFT) will report earnings on October 28, while Amazon (AMZN) and Intel (INTC) will report earnings on October 29.

Cloud computing and AI business growth, capital expenditure, digital advertising, and e-commerce demand will be key areas of market focus.

Major Events Preview

October FOMC Meeting: Policy Statement and Future Rate Trajectory in Focus

The Federal Reserve will hold its October FOMC meeting from Tuesday to Wednesday (October 27–28), releasing its monetary policy statement at 2:00 p.m. on October 28, followed by a press conference at 2:30 p.m.

In September, the Federal Reserve raised the target range for the federal funds rate by 25 basis points to 3.75%–4.00%, marking its first rate hike since July 2023. Recently released employment, inflation, and consumer spending data will serve as key references for officials in assessing policy rates.

The October meeting will not include a Summary of Economic Projections or a dot plot. Market participants will focus closely on the wording of the policy statement and the Fed Chair's assessment of inflation, the labor market, and future policy conditions to gauge the potential policy direction for the December meeting.

If the Fed continues to emphasize inflation risks and the possibility of further rate hikes, U.S. Treasury yields and the U.S. dollar could rise, putting pressure on high-valuation tech stocks; if the statement indicates a preference to pause rate hikes, market risk appetite could be supported.

Alphabet and Microsoft Earnings: Cloud Computing and AI Investments in Focus

Alphabet will report its third-quarter 2026 financial results after the U.S. market close on Wednesday (October 28), followed by an earnings call at 4:30 p.m.

The market will focus closely on revenue growth in Google Search & other, YouTube ads, and Google Cloud, as well as the impact of AI infrastructure investments on capital expenditures, depreciation expenses, and profit margins.

Management's updates on user growth and monetization progress for search products such as AI Overviews and AI Mode may also influence market expectations for the company's future growth.

Microsoft will report its first-quarter fiscal 2027 financial results after the U.S. market close on the same day, followed by an earnings call at 5:30 p.m.

Investors will focus on revenue growth in Azure and other cloud services, the Microsoft 365 Commercial cloud business, demand for AI services, and data center capital expenditures. The market will also watch whether new AI compute capacity can ease supply constraints and drive further growth in cloud revenue.

Amazon Earnings: AWS Growth and Capital Expenditures Under Scrutiny

Amazon will report its third-quarter 2026 financial results after the market close on Thursday (October 29), followed by an earnings call at 5:00 p.m.

The company previously forecasted third-quarter net sales of $197 billion to $202 billion, representing year-over-year growth of 9% to 12%, and operating income of $22.5 billion to $26.5 billion.

The market will focus on AWS revenue growth, demand for cloud computing and AI services, as well as North America retail segment margins and advertising revenue. As the company continues to expand AI infrastructure investments, investors will also observe the impact of capital expenditures on free cash flow and overall profit margins.

Core Schedule for the Week

Monday (October 26)

Key Events: Verizon Earnings, Amkor Technology Earnings

The U.S. lacks major economic data that could significantly impact markets on this day. With the Fed's October FOMC meeting set to begin the next day, market focus may shift to the policy interest rate and the meeting statement.

On the earnings front, Verizon (VZ) will report results before the market open; Cadence Design Systems (CDNS), Nucor (NUE), Rambus (RMBS), and Amkor Technology (AMKR) will report results after the market close.

Tuesday (October 27)

Key Events: Fed October FOMC Meeting, Boeing Earnings, Visa Earnings

The Federal Reserve will begin its two-day October FOMC meeting.

On the economic data front, the U.S. will release September durable goods orders at 8:30 a.m. and September new home sales data at 10:00 a.m. Durable goods orders reflect manufacturing demand and corporate equipment investment, while new home sales help observe housing demand in a high-interest-rate environment.

On the earnings front, UPS (UPS) and Boeing (BA) will report third-quarter results before the market open; Visa (V) will report fourth-quarter and full-year fiscal 2026 results after the market close.

Wednesday (October 28)

Key Events: Fed October FOMC Rate Decision, Alphabet Earnings, Microsoft Earnings

The Federal Reserve will release its FOMC rate decision and monetary policy statement at 2:00 p.m. No Summary of Economic Projections or rate dot plot will be released at this meeting, so the market will focus on hints regarding the future direction of interest rates provided in the policy statement and press conference.

On the earnings front, both Alphabet and Microsoft will report results after the market close. Alphabet's digital advertising, Google Cloud, and AI product progress, along with Microsoft's Azure business growth and artificial intelligence infrastructure spending, will be key areas of market focus.

Thursday (October 29)

Key Events: U.S. Q3 GDP, U.S. September PCE, Amazon Earnings, Intel Earnings

The U.S. will release the preliminary estimate of third-quarter GDP and the September Personal Income and Outlays report—which includes headline and core PCE price indexes—at 8:30 a.m. Because these data points will be released after the FOMC rate decision, their impact will mainly be reflected in market expectations for the December meeting and subsequent policy path.

If economic growth is stronger than expected and core inflation remains high, market expectations for further rate hikes may heat up; if GDP and consumer spending data weaken significantly, investors' concerns over slowing economic growth could increase.

On the earnings front, Mastercard (MA), Eli Lilly (LLY), and Caterpillar (CAT) will report results before the market open; Amazon and Intel will report results after the market close.

Friday (October 30)

Key Events: ExxonMobil Earnings, Chevron Earnings

The U.S. Bureau of Labor Statistics will release the third-quarter Employment Cost Index at 8:30 a.m. This indicator measures employer costs for wages, salaries, and benefits, serving to gauge labor cost pressures. If growth exceeds expectations, market concerns over sticky inflation may rise; if growth slows, it may suggest easing cost pressures.

On the earnings front, ExxonMobil (XOM) and Chevron (CVX) will report third-quarter results. The market will focus on oil and gas production, refining margins, capital expenditures, and shareholder returns.

Overall, market focus for the week will center on the Fed rate decision, U.S. third-quarter GDP, PCE inflation data, and major tech company earnings.

The FOMC meeting will set the short-term policy direction, while the subsequent GDP and PCE data could impact interest rate expectations for December; earnings from Alphabet, Microsoft, and Amazon will reflect demand across digital advertising, cloud computing, AI investment, and e-commerce.