Fed decision and Big Tech earnings: What to watch this week

When is the Fed decision, and what is expected?

The Federal Open Market Committee, the Fed's rate-setting group, holds a two-day meeting Tuesday and Wednesday. The Fed's official calendar lists the policy statement at 2 p.m. ET Wednesday, Oct. 28, and Warsh's news conference at 2:30 p.m. ET. This meeting does not include new economic projections from officials; those come at the next meeting, Dec. 8–9, according to the Fed. Minutes of this week's meeting are scheduled for Nov. 18.

At its last meeting, on Sept. 16, the committee voted 12-0 to raise its benchmark rate by a quarter of a percentage point, to a range of 3.75% to 4%. "Inflation remains elevated," the Fed said in that statement.

Heading into this week, futures markets were pricing close to a 90% chance of no change, Yahoo Finance reported on Sunday. That held on Monday: CME FedWatch put the odds of a hike this week at about 9%, Investopedia reported, and analysts at Goldman Sachs wrote that they expect the Fed to skip an increase now and likely deliver one in December, according to Reuters. Several economists quoted by the outlet expect what former Fed Vice Chair Alan Blinder called a "hawkish pause": holding rates for now while signaling that more increases are possible. The minutes of the September meeting showed most officials saw another increase as likely appropriate before year-end, Yahoo Finance reported.

Not everyone thinks a pause is the right call. Former IMF chief economist Kenneth Rogoff told Yahoo Finance that, if not for the election, the Fed should be raising rates. The midterm elections are Tuesday, Nov. 3, six days after the decision. Cleveland Fed President Beth Hammack has favored raising rates now, and Chicago Fed President Austan Goolsbee called September's consumer price data "discouraging," according to the same report. Fed Vice Chair Philip Jefferson and New York Fed President John Williams have signaled support for patience, CNBC reported.

Why is inflation the central issue?

Consumer prices rose 3.7% in the 12 months through September, and producer prices rose 6.3%, CNBC reported. That is well above the Fed's 2% goal, which Warsh called "a firm, fixed target" in his Jackson Hole speech this summer, according to CNBC.

The broader backdrop is energy. Brent crude, the international benchmark, settled at $116.72 a barrel on Friday, its highest close since April 29, CNBC reported, as traders weighed the risk of renewed U.S. strikes on Iran. U.S. crude settled at $103.27. Prices eased on Monday: in afternoon trading, Brent was down 0.8% at $115.75 and U.S. crude was down 1.3% at about $102, Investopedia reported. The 10-year Treasury yield slipped to 4.98% from 5.00% on Friday, AP reported.

Thursday's data will add to the picture. The Commerce Department's September report on personal consumption expenditures, the Fed's preferred inflation gauge, is due at 8:30 a.m. ET, with core prices expected to rise 3.1% from a year earlier, according to CNBC. The first estimate of third-quarter gross domestic product is due at the same time.

Former Kansas City Fed President Esther George told Yahoo Finance that "communication is more important than ever." A weak September jobs report has curbed expectations of a hike this week, CNBC reported. Still, economist Gregory Daco of EY told the outlet that the Fed is under mounting pressure to follow through on what it has signaled.

Which Big Tech companies report this week?

Three of the largest U.S. companies report Wednesday and Thursday, around the Fed decision:

• Microsoft publishes results for its fiscal first quarter after the market closes Wednesday, Oct. 28, with a conference call webcast at 2:30 p.m. Pacific time (5:30 p.m. ET), the company said.
• Alphabet, Google's parent company, holds its third-quarter call Wednesday, Oct. 28, at 4:30 p.m. ET, the company said.
• Amazon holds its third-quarter call Thursday, Oct. 29, at 5 p.m. ET, the company said.

In all, 163 companies in the S&P 500 are scheduled to report during the week, CNBC reported. Oil majors ExxonMobil and Chevron report Friday.

Two other tech giants are on different schedules. Meta already reported on Oct. 21; its stock was down more than 9% for the week as of Friday afternoon after the company reported negative free cash flow, CNBC reported. Apple reports its fiscal fourth-quarter results on Monday, Nov. 2, according to MacRumors, citing Apple's investor relations page.

Why are investors focused on AI spending?

Spending on artificial intelligence, especially data centers, is the main question. Mark Mahaney of Evercore ISI told CNBC that capital spending plans could rise by as much as $100 billion, and that, after recent selling, investors' fears are already reflected in share prices. As of Friday afternoon, Alphabet shares were down more than 5% for the week and the Nasdaq was on track to end October down more than 3%, CNBC reported.

Investors will be looking at how much Microsoft, Alphabet and Amazon plan to spend, and whether cloud revenue is growing fast enough to justify it. Those three companies carry heavy weight in major indexes, so their results can move the broader market. Stocks started the week higher: shortly after Monday's open, the S&P 500 was up about 1% and the Nasdaq about 1.2%, Reuters reported, as AI-linked shares steadied after last week's selling. Also on Monday, AI company Anthropic, which counts Amazon and Google among its biggest investors, publicly filed to list its shares on Nasdaq; NewsCubby has a breakdown of what the filing shows.

What does this mean for my interest rates?

The Fed's benchmark rate influences what banks charge on credit cards, home equity lines and other variable-rate loans, and what they pay on savings accounts. If the Fed holds this week, as markets expect, those rates are unlikely to change much right away. If officials signal a December increase, as many economists quoted by Yahoo Finance expect, borrowing costs on variable-rate debt could rise further later this year. Savers, on the other hand, have generally benefited from higher yields on savings accounts and certificates of deposit.

What about mortgages?

Mortgage rates don't move in lockstep with the Fed. They tend to follow longer-term Treasury yields and investors' inflation expectations. The average 30-year fixed rate was 7.32% in the week ending Oct. 22, down from 7.40% the week before but up from 6.19% a year earlier, according to Freddie Mac. The 15-year rate averaged 6.68%. Freddie Mac chief economist Sam Khater said the dip gives people looking to buy a home a bit of breathing room.

A hawkish tone from Warsh on Wednesday, or a hot inflation reading Thursday, could push longer-term yields, and mortgage rates, higher. A softer message could do the reverse.

What does it mean for my 401(k)?

Retirement accounts that hold broad stock index funds have significant exposure to the largest tech companies. That means the earnings from Microsoft, Alphabet and Amazon, plus the Fed's message, could cause bigger-than-usual swings this week. Bond funds are sensitive to interest-rate expectations. Financial planners generally advise long-term savers not to make changes based on a single week's news; NewsCubby does not give investment advice.

And gas and oil?

The national average for regular gasoline was $4.2858 a gallon on Monday, according to AAA, down slightly from $4.2892 on Sunday and from $4.4874 a month ago, but far above $3.0532 a year ago. Diesel averaged $6.3492.

Brent gained 3.1% on Friday alone, CNBC reported, as U.S. officials told The New York Times that the U.S. and Israel have plans for fresh strikes on Iran after the midterm elections. Iran-allied Houthi militants have also kept targeting Saudi Arabia, according to CNBC. President Donald Trump said Wednesday the U.S. was not negotiating with Iran, according to CNBC. On Monday, Yemen's Houthis said they had attacked Saudi Arabia's East-West crude pumping stations and Riyadh's airport, with no immediate confirmation from Riyadh, Reuters reported; the same report said oil had eased after reports that Qatari mediators were in Tehran on Sunday in an effort, coordinated with the U.S., to lower tensions. Higher crude prices tend to reach the pump with a lag, and they also feed into the inflation numbers the Fed is watching. ExxonMobil and Chevron's results Friday will offer a look at how oil companies are faring.

What we know

• The Fed decision is at 2 p.m. ET Wednesday; Warsh speaks at 2:30 p.m. ET.
• Microsoft and Alphabet report Wednesday after the close; Amazon's call is Thursday at 5 p.m. ET.
• Inflation (PCE) and GDP data arrive Thursday at 8:30 a.m. ET.

What we don't know yet

• Whether the Fed holds or raises rates, and how the vote splits.
• How much more Big Tech plans to spend on AI.
• Where oil prices go if U.S.-Iran tensions escalate or mediation makes progress.

What happens next

After this week, the next Fed meeting is Dec. 8–9, with new projections. Apple reports Nov. 2, and the midterm elections are Nov. 3. NewsCubby will cover the Fed decision Wednesday.

*Credits: reporting from the Federal Reserve, Yahoo Finance, CNBC, Investopedia, Reuters, AP, Freddie Mac, AAA, Microsoft, Alphabet, Amazon and MacRumors. Photo: Federal Reserve / Wikimedia Commons, public domain. NewsCubby articles are produced with AI assistance and reviewed by humans. This article is for information only and is not financial advice.*

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