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Nasdaq 100 Index futures dropped 0.9% and contracts for the S&P 500 slipped 0.4% as Alphabet slumped 10% in extended trading after the Google parent’s sales underwhelmed. MSCI Inc.’s Asia Pacific equities gauge climbed 0.3%, led by gains in Japan’s Nikkei 225 and South Korea’s Kospi indexes.
Sentiment elsewhere held up, with Microsoft Corp. shares rising 2.8% in after-hours trading on solid cloud sales, while Oracle Corp. earlier surged 11% after issuing a long-term outlook for free cash flow. A gauge of Oracle’s credit risk improved the most in nearly nine months.
“The divergence in after-hours trading between Alphabet and Microsoft shares highlights growing scrutiny of how big tech companies are funding their ambitious data center build-outs,” said Hugh Lam, a Sydney-based investment strategist at Betashares Capital Ltd.
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Meanwhile, yields on short-dated Treasuries fell after the Federal Reserve held off on raising interest rates while signaling fewer policy-setting meetings next year, leaving traders recalibrating bets on the central bank’s rate path. The dollar slipped during the New York session and gold edged up to about $4,065 an ounce.
Attention now turns to whether tech earnings can sustain the AI rebound and incoming US data support the Fed staying on hold through year-end. Renewed tensions with Iran risk pushing oil higher and complicating the inflation and rates outlook.“The Fed appears comfortable being patient for now as financial conditions have evolved broadly in line with expectations,” said Luis Alvarado at Wells Fargo Investment Institute. “But patience should not be confused with complacency.”
The Federal Open Market Committee voted 10-2 to hold its benchmark federal funds rate in a range of 3.75% to 4%. In their post-meeting statement, policymakers said they hoped incoming data in the coming weeks would help inform their next decision.
Fed Chairman Kevin Warsh said officials have “made clear our readiness to act as circumstances require, and we have shown our willingness to act.” Warsh also said the central bank will phase in an adjusted meeting schedule, with plans to hold rate-setting votes at seven out of eight meetings next year.
“Fewer decision meetings plus no forward guidance are a recipe for bigger repricing around each one, and more volatility around rates than markets are currently pricing,” said Ali Hassan, portfolio manager at Santa Fe, New Mexico-based Thornburg Investment Management.
Meanwhile, global bond sales have soared to an all-time high, catapulted by breakneck borrowing from the tech juggernauts at the forefront of the AI boom.
Financial firms, companies and governments have raised a combined $6.61 trillion through investment-grade and junk-bond sales so far this year, up 15% from the same period a year earlier and eclipsing 2025’s record with two months still to go, according to data compiled by Bloomberg.
Elsewhere, Israeli Prime Minister Benjamin Netanyahu managed to hold on to power after a stronger-than-expected performance in Israel’s elections, an outcome that could impact the next phase of the war in Iran.
American crude gave up some of Thursday’s gains to trade around $102 a barrel. The US has told several Persian Gulf nations to be prepared for a short, intense campaign, the Wall Street Journal reported previously, citing unidentified people. US President Donald Trump hasn’t decided to go ahead, but was leaning toward a large post-election attack, the newspaper said.
“The market is pricing in a larger probability of re-escalation,” said Warren Patterson, head of commodities strategy at ING Groep NV. “Oil prices remain sensitive to developments in the Persian Gulf, specifically around what action, if any, the US may take following the US midterm elections.”
