October 29th Pre-Market Brief

Good Morning

Microsoft spent the whole morning up about after a strong quarter, then gave most of it back within minutes of the open. Alphabet is headed for its worst day after an earnings report since it went public, and it’s taking most of tech red with it.

Smaller companies and bank stocks are both up, which tells me people are moving money around more than they’re pulling it out. Today is a bit of a rebalancing day.

Let's dig in...

Today's Big Picture

1. 1. Google’s AI Search Is A Hit That Pays Less

   Alphabet says Google searches grew at the fastest pace in five years as people took to its new AI Mode, but an AI search brings in less ad money than a regular one. Search revenue grew 12% from a year ago, slowing from 17% last quarter and 19% the quarter before. The company also spent $51.4 billion on data centers and chips in three months, and $9.1 billion more cash went out the door than came in. Google says it’s working on getting more ad money out of AI Mode now, and next quarter’s search growth will show if that’s paying off.
   

   2. Today’s Data Sided With The Two Fed Officials Who Wanted A Hike

   The Fed held rates at 3.75 to 4 percent yesterday, but two officials voted to raise them, including Lisa Cook, who had voted with the majority since she joined more than four years ago. This morning the Fed’s favorite inflation gauge, which tracks prices on what households spend money on, showed prices up 3.6 percent from a year ago, faster than August’s 3.4 percent. The economy, measured by the value of everything the country produces, grew at a 3.4 percent yearly pace over the summer, faster than the 3.1 percent forecasters expected. Investors already expect a hike in December, and both reports make it more likely.
   

   3. Oil Traders Are Watching The Week After The Midterms

   Brent crude, the global oil price, slipped below $110 a barrel after The Wall Street Journal reported Vice President JD Vance wrote to a top Iranian hard-liner to restart peace talks. The same paper also reported the U.S. has told Gulf Arab countries to get ready for a short, intense military campaign after the midterms, which are Tuesday. Oil stored on land around the world is near its lowest level in at least a decade, according to the International Energy Agency, so there’s little cushion if that happens. A reply from Tehran before Tuesday would be the first sign that worry can come out of the price.

Market Overview

Today’s Sponsor

Capital Is Flooding Into The Physical AI Revolution

AI is stepping out of the screen and into the physical world. Robotics VC deals hit record highs in early 2026: nearly $16B across 450+ deals.

Labor shortages, aging workforces and breakthroughs from NVIDIA, Tesla and specialized suppliers are accelerating automation in factories and warehouses worldwide.

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Stock Spotlight (pre-market)

Caterpillar $CAT ( ▲ 0.01% )  
sharply lower premarket even though the equipment maker, a big supplier of generators and turbines to AI data centers, beat profit estimates. Construction sales came in a bit light, and it held its full year outlook when analysts wanted a raise.

Eli Lilly $LLY ( ▲ 0.5% )  
higher premarket after the drugmaker beat estimates and raised its 2026 sales forecast to as much as $92 billion, from $87 billion. Weight loss drug Zepbound and diabetes drug Mounjaro both topped forecasts, while its new obesity pill Foundayo fell short.

Fortinet $FTNT ( ▼ 23.85% )  
sharply lower premarket after the cybersecurity company beat overall but came in slightly short on services sales and margins. The stock had more than doubled this year, and rivals Palo Alto Networks and CrowdStrike are falling with it.

ServiceNow $NOW ( ▼ 3.0% )  
sharply lower premarket after the business software company missed quarterly profit estimates, which outweighed a higher full year subscription forecast. Other software stocks are lower too, on worries that AI tools will eat into their business.

DoorDash $DASH ( ▼ 0.63% )  
higher premarket after the food delivery company agreed to buy Instacart parent Maplebear $CART ( ▼ 2.76% ) for $65 a share, about $17 billion. The deal pushes DoorDash deeper into grocery delivery, and it also beat quarterly sales estimates.

Marvell Technology $MRVL ( ▼ 12.55% )  
sharply lower premarket after Bloomberg reported the chip designer could announce a deal for optical parts maker Lumentum $LITE ( ▲ 5.52% ) as soon as next week. Lumentum, up on the report, is worth about $83 billion, more than a third of Marvell’s value.

What to Watch

Amazon’s Spending Plan (After the Bell)
Amazon plans to spend about $220 billion this year on data centers and equipment. A higher number would help the AI suppliers sold off this morning. If Amazon blames late suppliers the way Microsoft did, smaller cloud providers take another hit.

Sandisk’s Forecast (After the Bell)
Memory chip stocks are slipping even after Samsung posted a record quarter. Sandisk beat estimates last quarter and still fell sharply after hours, so its outlook for next quarter matters more than tonight’s numbers. Analysts expect about $10.6 billion in sales.

Intel’s Profit Margin (After the Bell)
Intel guided to about 42 cents of gross profit on each dollar of sales, barely better than last quarter. The stock is down about a third from its high this year, and options traders are betting on a big move either way.

Today’s Sponsor

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