What Happened Yesterday
Wednesday, October 28, 2026
The 30-second version: the Fed left interest rates alone, stocks inched up, and companies that build AI data centers had a big day. Overnight, Alphabet's spending scared investors, and Nasdaq futures fell. Your 401(k) had a quiet Wednesday. This morning might be louder.
Market | Wednesday close | Move | Report card |
|---|---|---|---|
S&P 500 | 7,743.98 | +0.28% | B, quietly |
Nasdaq Composite | 26,549.85 | +0.27% | B, same as the S&P |
Dow Jones | 52,475.10 | +0.19% | Showed up |
Chip index (SOX) | 11,684.00 | +1.75% | Extra credit |
VIX (fear gauge) | 16.91 | -3.48% | Napped in class |
Small caps (IWM, fund) | $281.29 | +0.40% | Passed |
Gold (GLD, fund) | $373.51 | +0.33% | Teacher's pet |
U.S. oil (USO, fund) | $166.57 | +1.64% | Talked back |
10-year Treasury rate | 5.05% | up from 4.99% | Detention |
Bitcoin | $81,268 | +0.57% | Stayed up late |
The fund rows (IWM, GLD, USO) are there for the move, not the price. USO tracks U.S. crude, not Brent. 10-year rate from the Treasury's daily curve. Bitcoin is a 24-hour close.
The $1,000 test: $1,000 in an S&P 500 fund made about $3 on Wednesday. $1,000 in Oracle made about $107. $1,000 in Vertiv made about $165. $1,000 in Alphabet is down about $100 before the opening bell today.
The Fed didn't change anything, and two officials wanted to
The Fed kept its target range at 3.75% to 4.00%, the rate that sets the tone for credit cards, car loans, and mortgages. The vote was 10-2 (Fed statement). Governor Lisa Cook and Cleveland Fed President Beth Hammack both voted to raise rates by a quarter point. Nobody voted to cut. That's the room we're in.
Chair Kevin Warsh said growth looks strong and jobs are fine, then got to the part that matters: "inflation is too high." He also said energy prices "moved higher again in recent weeks" (press conference transcript). He gave no hint about December, because he doesn't do hints. He also announced that in 2027, one of the Fed's eight meetings will be for big-picture strategy only, with no rate vote. One fewer scheduled chance to raise rates. Same number of chances to talk about it.
The 10-year Treasury rate, which drives mortgage rates, rose to 5.05% Wednesday from 4.99% (Treasury). Betting sites, where people bet real money on events, still see about a 77% to 78% chance of a hike in December (Polymarket and Kalshi, about 5 AM CT today). Futures markets put it higher, above 80% (CME FedWatch, per Fox Business and CNN).
The Fed is the teacher who didn't hand out a pop quiz on Wednesday, but left the quiz sitting face-down on the desk where everyone can see it. Two officials already wanted to pass it out. December is the next class.
Oracle turned in a homework plan
and the AI builders got extra credit
Oracle jumped 10.73% to $144.54. For months, investors asked how it would pay for all those AI data centers. At its investor day, Oracle finally showed its work: about $30 billion or more of free cash flow, the cash left after paying for buildings and equipment, by the fiscal year ending May 2029. It also capped new borrowing and stock sales at $20 billion through 2030 (Oracle's SEC filing). That's a company promising its parents it will ask for less money. Wall Street believed it, for one day.
The cheering spread to the companies that build and power data centers. Vertiv, which makes power and cooling gear, jumped 16.48% after sales grew about 61% to $4.3 billion, well above the roughly $3.8 billion expected, and it raised its outlook (StockStory, via Yahoo Finance). Memory chipmaker Micron rose 5.86%.
The biggest AI names sat this one out. NVIDIA fell 1.17% and Meta 1.24%.
Wall Street is starting to grade AI on whether the spending ever pays for itself, not just on how big it is. Oracle got an A for showing a plan. The plan doesn't pay off until 2029, which in tech years is roughly the next ice age.
After the bell: Alphabet aced cloud and still got a note sent home
Alphabet, Google's parent, reported after the close, which is 3 PM CT. Sales grew 25% to $127.6 billion, and Google Cloud, which rents computing power to other companies, more than doubled, up 103% to $30.7 billion (Alphabet's release). That's an A.
The note home was about searching and spending. Google Search brought in $63.4 billion, short of the $64.9 billion analysts expected (Yahoo Finance). And Alphabet spent $51.4 billion on data centers and equipment in three months, so its free cash flow came in at negative $9.1 billion (Alphabet's release).
Profit came in at $2.12 a share, under the roughly $2.94 to $3.02 analysts expected (EODHD, Yahoo Finance). About 55 cents a share came from a paper loss on Alphabet's stock investments, mostly its stake in SpaceX, not the business itself (Alphabet's release and quarterly filing). Even without it, profit of about $2.67 a share fell short. The stock was down about 10% before the market opened (Yahoo Finance, about 4 AM CT).
Microsoft had the better night. Sales rose 19% to $92.3 billion, and Azure, its cloud business, grew 48% (Microsoft's release). Profit was $4.89 a share on the company's adjusted basis, ahead of the $4.71 expected (EODHD). The stock was up about 3% early this morning (Yahoo Finance, Investing.com).
Two students, same class, same giant AI science project. Microsoft showed the project was already earning money. Alphabet showed the project was eating the lunch money. Investors forgive the spending as long as the grades keep coming in faster than the bills.
Quick hits
Korea: after Tuesday's 6.63% party, South Korea's Kospi fell 1.24% today to 5,937.66. Samsung dropped 4.13% even after a record quarterly profit (Yahoo Finance). Tough crowd.
Oil: the U.S. oil fund rose 1.64% Wednesday. Government data showed U.S. crude supplies fell about 1.9 million barrels last week (Energy Information Administration).
What to Watch Today
Futures point to a rough start for tech
Futures, which are bets on where stocks will open, had the Nasdaq 100 down about 1.3%, the S&P 500 down 0.4%, and the Dow up 0.3% (Yahoo Finance, about 3 AM CT).
The calendar (all times CT)
Time | What | Watch for |
|---|---|---|
Before the open | Earnings: Eli Lilly, Mastercard, Caterpillar, Merck | Lilly is the weight-loss-drug story. Watch whether sales keep climbing. |
7:30 AM | Q3 GDP, the economy's report card (Commerce Department) | Forecast: about 3.2% growth (Yahoo Finance). Warsh already said, "above 3." Watch for a big miss either way. |
7:30 AM | September PCE prices, the Fed's favorite inflation gauge (Commerce Department) | Forecast: core prices, which skip food and energy, up 3.1% from a year ago, after 3.0% last month. Anything hotter makes December louder. |
7:30 AM | Weekly jobless claims (Labor Department) | Forecast: about 199,000. Still very low. |
8:15 AM | European Central Bank rate decision | Expected to hold at 2.50%. Betting sites call a hold a near-lock (Polymarket). |
11:00 AM | Freddie Mac weekly mortgage rate | Last week: 7.32%. Watch whether it follows the 10-year backup. |
After the close | Earnings: Amazon, Intel, Starbucks, Coinbase, Reddit | Amazon is the last big cloud report this week. Same question as Alphabet: how much is it spending, and is it paying off? |
The one thing that could ruin everyone's day: a hot inflation number at 7:30 AM. Tech is already down before the bell. A core PCE above 3.1% hands the Fed a reason to hike in December, on a morning when investors are already nervous about how much AI costs. Bad grades and a big tuition bill, delivered before breakfast.
Bottom line: the Fed didn't grade anybody this week. The market did, and it turns out it grades on cash.
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Disclaimer: This is not financial advice. We are a newsletter with opinions and a spreadsheet. Do your own homework, and please don't let a stock's report card decide your allowance.