☕️ Alphabet set for its biggest post-earnings drop ever

Hi there, this is your daily ☕️ Finpresso.

In today's newsletter:

📉 Alphabet set for its biggest post-earnings drop ever

🏦 Fed holds rates steady despite two dissents

☁️ Microsoft beats estimates on Azure AI growth

⚖️ DOJ questions Nvidia over $12.9B Hugging Face deal

💵 Coinbase lists Ripple's RLUSD stablecoin

Plus: 🌍 9 macro stories, 🏢 10 corporate stories, and 📑 6 research & reports.

📊 Before The Bell

• Alphabet sank 10% in premarket trading today, putting it on course for its worst-ever reaction to earnings since going public in 2004, a close down more than 9.77% would set that record.
• The drop followed a cash burn: Alphabet reported negative free cash flow of $9.07 billion for the third quarter, more than three times the shortfall analysts expected, even as it stuck to its full-year capital spending guidance.
• Microsoft rose nearly 4% on what one analyst called a more "measured" build-out, with capital spending coming in below forecasts, a split that shows investors rewarding restraint as they scrutinize returns on AI spending.

• The Federal Reserve left interest rates unchanged today, with two officials dissenting in favor of a quarter-point hike as policymakers wait for more data on whether inflation requires further tightening.
• The dissenters were Cleveland Fed President Beth Hammack and Governor Lisa Cook, whose first-ever dissent reinforced investor bets on a December rate increase, with the Iran war continuing to push energy costs higher even as other indicators improve.
• Chair Kevin Warsh insisted "politics played no role" despite White House pressure to hold before next week's midterms, and said higher rates are already cooling the AI boom as investors pull back from tech borrowers.

• Microsoft shares jumped more than 5% yesterday afternoon after its Azure cloud business grew 48% in the September quarter, driving revenue and profit past Wall Street forecasts.
• Total revenue hit $92.3 billion and profit topped $36.6 billion, both running ahead of analyst expectations, with AI demand powering the cloud unit.
• The results land as Microsoft spends heavily on AI, nearly doubling its property and equipment outlays to $39 billion year-on-year, while rival Google's cloud revenue doubled to $30.7 billion, narrowing the gap with Azure.

• The Justice Department is scrutinizing Nvidia's roughly $13 billion purchase of Hugging Face, the open-source platform for AI models, probing whether the deal could disadvantage rival developers in the field.
• Announced in September, the acquisition brings Nvidia a platform used by more than 18 million people and over 200,000 companies, and one that also sells tools to chipmakers and others building closed, proprietary AI.
• It is Nvidia's second-biggest deal after its $20 billion purchase of Groq assets late last year, which has also drawn DOJ scrutiny; the closest comparison is Microsoft's $7.5 billion GitHub buy in 2018.

• Coinbase has added Ripple's RLUSD stablecoin across its Prime, Exchange and retail platforms, giving both retail and institutional clients a new way to hold and trade the dollar-pegged token.
• Customers can swap U.S. dollars and other supported dollar-backed stablecoins into RLUSD at a one-to-one rate, with deposits and withdrawals running on the XRP Ledger, Ethereum and Coinbase's Base network.
• The listing caps a busy stretch for Ripple: RLUSD, launched in December 2024, has passed $2.6 billion in market value and just won Moody's A2 long-term deposit rating, with support for using it as trading collateral expected to follow.

🌍 Macro News

• Oil fell on renewed U.S.-Iran peace efforts easing supply fears. LINK
• EU energy ministers meet over surging fuel costs and winter shortages. LINK
• New Zealand dollar slumped after central bank held rates, defying hike bets. LINK
• Healey's budget cuts energy bills, raises bank taxes, boosts defense spending. LINK
• Kalshi executives face Utah criminal filing over sports bets. LINK
• Selig says autonomous AI trading agents pose unresolved regulatory questions. LINK
• Bank of England consults on allowing tokenized collateral at clearing houses. LINK
• EPA modeling says methane rollback would barely reduce U.S. oil prices. LINK
• Lagarde told officials she will leave the ECB presidency in February 2027. LINK

🏢 Corporate News

• SK Hynix surged after earnings beat, lifting memory-chip shares. LINK
• Google expands AI Search ads internationally as core search growth slows. LINK
• Oracle rallied as financial targets eased concerns over AI data-center spending. LINK
• Samsung's profit met forecasts as AI demand boosted advanced memory chips. LINK
• ServiceNow sank after fourth-quarter revenue guidance missed Wall Street forecasts. LINK
• GE Vernova will buy grid-equipment maker Trench Group for $9 billion. LINK
• Shell profit nearly doubled, beating forecasts on higher crude and refining margins. LINK
• Wealthsimple raised C$425 million, reaching a C$13.8 billion valuation. LINK
• FTC orders nine companies to explain data-driven pricing and gig-pay practices. LINK
• DTCC launched tokenization service with 20 clients, meeting its October target. LINK

📈 Stocks

📑 Research & Reports

• 7 AI stocks to own in 2026: names the AI companies MarketBeat rates as long-term holds this year, in a free report. Get the free report
• AI services could create $100 billion to $200 billion in new work by 2030. LINK
• AI-related employment pressures are spreading beyond technology, Goldman economist says. LINK
• Russian crude exports remain near prewar levels despite sanctions and strikes. LINK
• Bitwise raised bitcoin's decade-ahead target to $1.6 million, far outpacing stocks. LINK
• Crypto adoption rose among U.S. adults, but recent usage stayed flat. LINK
• Anthropic experiment finds AI agents can influence human overseers' decisions. LINK

📅 Market Calendar

💬 How did you find today's edition?

We read every reply — just reply to this email and let us know how we can improve!