Five stories shaping global markets and business on October 30, 2026.
1. Tech shares fall as AI concerns rattle markets
Global technology shares came under pressure as investors reassessed the scale and potential returns of artificial intelligence investment. Alphabet plunged 12.6% on Thursday, wiping around $500 billion from its market value, after its latest results highlighted mounting AI-related costs and negative cash flow. Intel and Amazon also fell, adding to pressure on technology stocks and semiconductor companies across Asia. The sell-off reflects a changing investor mindset: companies are no longer being rewarded simply for expanding AI capacity. They must demonstrate that spending can translate into sustainable revenue, profits and shareholder returns.
2. Federal Reserve holds rates steady but signals caution
The Federal Reserve kept its benchmark interest rate unchanged at 3.75%–4.00% following its October meeting. The decision was approved by a 10–2 vote, with two policymakers favouring a quarter-point increase. The Fed described economic activity as expanding at a strong pace, supported by resilient domestic spending and robust capital investment, but acknowledged that inflation remains elevated. Its decision to wait for further data leaves the next policy move uncertain. For businesses and investors, the message is that borrowing costs may remain restrictive while policymakers assess whether inflation is moving sustainably towards target.
3. Big Tech earnings reveal contrasting returns from AI investment
The latest results from Microsoft and Alphabet highlight two different sides of the AI investment cycle. Microsoft reported that Azure revenue grew 48% to $33.17 billion in its latest quarter, exceeding analyst expectations. Alphabet’s Google Cloud revenue more than doubled to $30.71 billion, also beating forecasts. However, Alphabet reported negative free cash flow of $9.07 billion as spending on infrastructure accelerated. The contrast is becoming increasingly important to investors: demand for AI services remains strong, but the ability to finance expansion and convert it into cash is emerging as a key competitive advantage.
4. Middle East tensions push oil prices higher
Oil prices climbed after a tanker was attacked in the Strait of Hormuz, renewing concerns about the security of a critical route for global energy shipments. Brent crude futures reached $116.08 a barrel in Friday trading, while US West Texas Intermediate rose to $103.37. Brent was heading towards a fourth consecutive monthly gain. The incident added to existing supply concerns linked to the conflict involving the United States, Israel and Iran. For companies, sustained energy-price increases can raise transport, manufacturing and operating costs, while also complicating central banks’ efforts to contain inflation.
5. ECB holds rates and maintains a data-dependent approach
The European Central Bank kept all three key interest rates unchanged at its October 29 meeting. The deposit facility rate remains at 2.50%, the main refinancing rate at 2.65% and the marginal lending rate at 2.90%. The ECB warned that rising energy prices create upside risks for inflation and downside risks for economic growth. It also noted that tighter financing conditions could weigh on both. The Governing Council reiterated that future decisions will depend on incoming data and will be taken meeting by meeting, without committing to a particular rate path.
Ahead
Investors will continue to assess the durability of AI-related growth and whether technology companies can turn infrastructure spending into stronger cash generation. Attention will also turn to upcoming US labour-market data, euro area inflation figures, the Bank of Japan’s next policy decision and further earnings from major technology and consumer companies. These releases will help shape expectations for corporate performance and the direction of monetary policy.
Sources: Reuters, Federal Reserve, European Central Bank.
This digest is for informational purposes only and does not constitute investment advice.
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