Big Tech Earnings & Fed Policy: Nvidia Hits $5T, Alphabet Beats, Microsoft Dips

Federal Reserve Policy Shift

• ⚠️ Jerome Powell signaled a divergence of views within the Federal Reserve regarding future monetary policy, tempering expectations for a December rate cut.
• 📉 Traders reduced bets on a December rate reduction following Powell's remarks, indicating a shift in market sentiment.
• 🏦 Officials implemented a second consecutive rate cut to support the labor market and announced an end to asset portfolio shrinkage by December 1st.

Nvidia's Historic Milestone and AI Frenzy

• 🚀 Nvidia achieved a $5 trillion market capitalization for the first time, driven by the ongoing AI spending boom.
• 💡 An analyst noted that Nvidia is reasonably valued, highlighting the company's strong performance and its significant contribution to the S&P 500's advance.
• 📈 The AI spend is differentiated from the 1990s tech bubble due to current companies having actual earnings.

Big Tech Earnings Reactions

• 📊 Alphabet reported strong earnings with EPS and revenue beating expectations, and Google Cloud secured a substantial backlog.
• 📉 Microsoft's earnings met or exceeded some estimates, but the stock dipped in after-hours trading, with attention focused on forward guidance and the AI pipeline.
• 💸 Meta experienced a significant stock drop in after-hours trading, partly due to a large one-off non-cash income tax charge of $15.93 billion, despite strong third-quarter ad revenue and EPS.

Other Notable Earnings and Market Performance

• ☕ Starbucks reported mixed results, with China comparable sales slightly below estimates but overall comparable sales beating expectations; however, adjusted operating margin fell short.
• 🚗 Carvana shares declined in after-hours trading despite a potential nudge above prior guidance for full-year EBITDA, with costs and expenses rising significantly.
• 📈 ServiceNow boosted its full-year subscription revenue forecast and beat look-back estimates, indicating positive momentum in its core business.
• 📉 The broader market saw mixed performance, with the Nasdaq finishing in the green, while the S&P 500 and Dow Jones Industrial Average ended the day lower.