Tech earnings and rate concerns weigh on global markets

Global markets had a mixed week as investors assessed technology earnings, Brazil’s presidential election, the UK Budget and central bank decisions. Alphabet shares fell 10% after the company revealed that AI spending had increased cash outflows by $51bn, underscoring concerns about whether infrastructure investment is generating sufficient revenue and profits. Microsoft reported Q3 revenue of $92.3bn, above the expected $90.6bn, supported by cloud-computing growth.

Anthropic filed documents for an initial public offering. Its 355-page filing highlighted rapid growth since its founding in 2021 and the substantial funding needed to develop more advanced models. Technology businesses continue to compete for capital, computing capacity and electricity. Upcoming results from AMD, Palantir and Apple will provide further signals on hardware, software and consumer technology demand.

Brazilian equities declined 14% and the real fell 8% against the US dollar following Luiz Inácio ‘Lula’ da Silva’s unexpected election victory. In the UK, the Budget included higher bank taxes to fund energy support and incentives for entrepreneurs, while official forecasts pointed to weak household income growth.

The Federal Reserve voted 10-2 to hold rates at 3.75%-4.00%, with dissenters favoring an increase. Markets priced an 83% probability of a rate rise at the December meeting. US midterm elections, the Bank of England’s next rate decision and geopolitical developments remain key investor concerns.