Week In Review: Big Tech Spent the Candy Money on Decorations

Happy Halloween. Last week, the mansion next door passed the hat (catch up here). This week the kids went door to door, and the biggest houses on the street had the best decorations anyone has ever seen. Sixty-foot skeletons. Fog machines. A robot spider that cost more than the town. Then Wall Street rang the doorbell, held out its pillowcase, and asked the one question nobody at those houses wanted to hear: "Where's the candy?"

Friday Oct 23 close to Friday Oct 30 close

Rows marked "fund" hold a group of stocks: watch the move, not the price. The VIX measures investor nervousness. It looks flat on the week only because it fell for three straight days, then jumped 12.9% on Friday. The worst sector is home to Alphabet and Meta. Second worst was technology, down 2.0%. Everything else went up.

The $1,000 test: Did you have $1,000 in the S&P 500 last Friday? You have about $994 now. In the Nasdaq? About $980. In the health care fund? About $1,031. In Alphabet? About $874. In Intel? About $756, which is an expensive rock.

For three days, everyone loved the decorations. Monday, Anthropic, the company behind the Claude chatbot, filed its paperwork to go public and showed first-half sales of $16.3 billion, about 14 times the year before (that was the dating profile). Tuesday, banks lined up $63 billion to pay for Broadcom chips Anthropic will rent (the rehearsal dinner). By Wednesday's close, the Philadelphia Semiconductor Index, a basket of 30 big chip stocks, was up 8.4% in three days. Great week to sell fog machines.

Then the report cards came. Alphabet's sales grew 25% to $127.6 billion, and Google Cloud, which rents computing power to other companies, more than doubled. Lovely skeleton. But Alphabet spent $51.4 billion on data centers and equipment in three months, and its free cash flow came in at-$9.1 billion, per its own release. Free cash flow is the money left over after paying the bills and building the stuff. Negative means you spent the candy budget, plus some of the mortgage, on the lawn.

Investors had expected about negative $2.7 billion (CNBC). Alphabet fell 12.64% Thursday, its worst day since its 2004 debut, per our own pull of its price history. That wiped out about $500 billion in stock market value (CNBC, Bloomberg). Gone between breakfast and dinner. We covered it live: the note home and the sequel.

Amazon came next. Sales rose 12% to $201.9 billion, and its cloud business grew 39.3%, its fastest in nearly five years. Over the past 12 months, though, free cash flow was negative $42.4 billion, and CEO Andy Jassy said Amazon will spend about $220 billion this year on buildings and equipment and "meaningfully more in 2027." Amazon fell 3.1% on the week. Meta, meanwhile, announced it wants to raise up to $95 billion by selling new stock, and fell 4.3%. When you're selling shares to pay for the fog machine, the neighbors notice the fog.

Nobody at the door doubts the skeleton is real. They just wanted a Snickers.

Not every big house flopped. Microsoft's Azure cloud grew 48%, and the stock fell only 0.5% on the week. Oracle jumped 10.7% Wednesday after promising to borrow less and make more cash by 2029, then gave back most of it in two days and finished up 3.6%. Wall Street's patience for a good 2029 story turns out to be about 48 hours.

Charlie Brown got rocks for free. Intel shareholders paid up for theirs.

The third quarter was actually fine. Sales rose 21% to $16.5 billion. Then Intel handed out next quarter's forecast: $15 billion to $16 billion in sales against the $17.1 billion analysts expected, and 25 cents a share in adjusted profit against 43 cents expected, per LSEG via CNBC. Its finance chief said the PC slowdown runs "at least through the first half of next year." An explosion at its plant in Israel earlier this month, which killed two workers, will cost about $600 million in lost sales (CNBC).

Intel closed Friday down 28.58% at $65.76. That's its worst day since July 1974 (Yahoo Finance, CNBC). The stock had been up about 150% on the year before this report, and $26 a share left the building in six and a half hours.

And here's the part that lands in your actual mailbox: you own some of it. The US government took a roughly 10% stake in Intel last year, and Friday's drop knocked $11 billion to $12 billion off that stake (Yahoo Finance, CNBC). Before anyone panics, the government paid $20.47 a share, so even after the drop the stake is worth about three times what taxpayers paid. Uncle Sam is still up on the rock. He's just learning what the rest of us know about Halloween: the bag doesn't always go up.

Intel had company at the bottom of the pillowcase:

Now zoom out, because this is the part the scary headlines skip. Nine of the 11 sectors rose. The equal-weight S&P 500 fund (RSP), where a toothpaste company counts as much as Nvidia, gained 0.8% while the regular S&P 500 lost 0.6%. That's the third straight week the average stock beat the giants. Small companies rose 1.3%. On Thursday, the day Alphabet cratered, the equal-weight fund actually gained 1.2%.

Who was handing out the good stuff?

And the funniest trophy of the week: Apple passed Nvidia as the world's most valuable company on Friday, $5.03 trillion to $4.93 trillion (Bloomberg). Apple fell 1.2% that day. It won by falling less. Bloomberg says investors went looking for perceived safety, and for one Friday, that was the whole sales pitch. Apple reports Monday, under new CEO John Ternus, and it had better have candy.

The house with the plain porch light and a bowl of Hershey bars beat the mansion again.

The Fed left its target range at 3.75% to 4.00% on Wednesday. The vote was 10-2, with Governor Lisa Cook and Cleveland Fed President Beth Hammack both voting to raise rates. Nobody voted to cut. Chair Kevin Warsh said "inflation is too high," and gave no hint about December, because this Fed treats hints the way dentists treat caramel.

The Commerce Department backed that up. Prices rose 3.6% from a year ago in September, and core prices, which skip food and energy, rose 3.1%. The Fed's goal is 2%. Meanwhile, the economy grew at a 3.4% annual pace from July through September. Strong growth plus hot prices usually means higher rates.

Then the officials started talking. St. Louis Fed President Alberto Musalem said Friday that another hike is needed soon, per Yahoo Finance and FXStreet. Richmond's Tom Barkin leaned the same way but wants to go slowly. Neither has a vote this year. They take turns. Dallas Fed President Lorie Logan, who does vote, has been pushing for at least a half point more since early October (Reuters).

Odds of a December hike still fell, from about 84% on Wednesday to about 70% on Friday, per CME FedWatch, which reads the odds from futures traders. Polymarket, a site where people bet real money on events, agrees at about 70.5%. Why would hike odds fall while officials talk about hiking? Two likely reasons: Wall Street was busy running from tech, and pay growth cooled a touch, with the government's employment cost index up 0.8% for the quarter after 0.9%.

Brent crude, the global oil price, settled Friday at $117.64 a barrel, up from $116.72 a week ago, and US crude at $104.12. Those are the highest closes since late April. Brent rose 13.6% in October and US crude 15.2% (Reuters via Korea Times).

One warning before Monday: the December contract, which expired Friday, was $117.64. The next one in line settled at $113.43. So Monday's headline may look like oil fell $4. It didn't. The label on the bag changed.

The reasons stacked up all week. A small boat attached explosives to a tanker in the Strait of Hormuz, per the British military's shipping office, and it caught fire. Iran's Guards claimed tankers hit mines, which US Central Command called false. Shipping incidents in October hit the highest monthly count of the war, per the same British data (Fox News). The US ordered non-emergency staff out of Saudi Arabia. And President Trump, who was briefed on military options, said Friday the war is "going to end very soon" and that Iran wants to talk. No direct talks are confirmed. Qatari mediators are back in Tehran. Your gas tank has heard this one before.

Somebody made money, though. Exxon's profit doubled to $15.4 billion. Chevron's nearly tripled to $9.9 billion. Both topped forecasts from analysts polled by LSEG, and both stocks hit all-time highs Friday (CNBC). The surprise came from refining. Exxon's refining arm earned about $7.2 billion, more than its oil and gas wells. Refiners are the plants that turn crude into diesel and gasoline, and there aren't enough of them right now. US diesel averaged $6.32 a gallon, up more than 70% from a year ago, per AAA via CNBC.

That's the number that hits everyone, even people who don't own a truck. Diesel moves your groceries, your Amazon boxes, and your kid on the school bus.

Polymarket is a site where people bet real money on events. Five of its biggest open economy bets by dollars wagered, per Polymarket's own data as of about 6:05 PM CT Friday:

1. How many Fed rate cuts in 2026? 96.8% say zero. ($55M bet.) Rate cuts moved out of the neighborhood and left no forwarding address.

2. Strait of Hormuz traffic back to normal by Dec 31? 10.5% yes. ($16M bet.) Down from 11.5% last week. The gas pump concurs.

3. Fed decision in December? 70.5% say a quarter-point hike. ($10M bet.) Nothing says "happy holidays" like a pricier car loan.

4. Largest company at the end of December? 54% Nvidia, 44% Apple. ($9M bet.) Apple took the crown Friday, and the bettors still lean Nvidia. Two months is a long time.

5. US recession by end of 2026? 6.5% yes. ($2M bet.) Bettors aren't worried about the economy. Just about everything in it.

The gold fund we track fell 2.9% this week to $355.78, after falling 4.0% last week. It's now down about 3.9% from a year ago. Gold itself sank to about $3,885 an ounce, its lowest of 2026, per FXStreet and Yahoo Finance.

War in the Gulf, a tech panic, oil near $118, and a crypto exchange robbed of billions. That's gold's entire job description. Grandma's coins called in sick. With the Fed talking about raising rates and government bonds paying more than 4.5% to do nothing, a shiny rock that pays zero is a tough sell. Bad week for rocks all around.

Freddie Mac's 30-year mortgage rate fell to 7.24% from 7.32%, and the 15-year to 6.60% from 6.68%. The 30-year is at its lowest level this month, per Freddie Mac. A year ago it was 6.17%. On a $350,000 loan, this week's drop saves about $19 a month on a standard payment, per our math. The 10-year Treasury rate, which steers mortgages, slid to 4.94% from 5.00% (Treasury Department).

For actual humans: two straight pizzas off your mortgage bill. Scared money running to government bonds did you a small favor. Take it. Just don't call it a trend until the Fed answers the door.

The fear gauge fell for three straight days to 16.91 on Wednesday, then jumped to 19.42 by Friday. A relaxed week that ended with someone jumping out of the bushes.

News sentiment, a score from 0 (doom) to 1 (sunshine) based on how headlines read, caught Alphabet going from about 0.82 on Tuesday to about 0.45 on Thursday. Reddit's headlines scored a sunny 0.81 on Thursday, the day before it fell 29%. Reddit, of all places, should know the crowd can be wrong.

Crypto had its own horror show. Binance, the world's biggest crypto exchange, says hackers took $6.3 billion, and about half has been frozen. Bitcoin fell 4.8% on the week to about $77,190. Coinbase fell 12.7% and Robinhood 10.6%. We can't yet say how much of that was the theft.

Phrase of the week: "free cash flow." Three words nobody wanted in their trick-or-treat bag.

Monday's appetizer was Anthropic's financial statements, served with a chip stock garnish and everybody going back for seconds. Tuesday's salad was $63 billion in borrowed croutons, while Boeing dropped its tray on the way to the table. Wednesday the Fed sent out a plain chicken breast, no sauce, no comment, and two diners asked to send it back hotter. Thursday's main course was Alphabet, cooked tableside, and half a trillion dollars caught fire before anyone got a fork in. The wine was a $117 Brent with notes of limpet mine. Friday's dessert was supposed to be Intel, and the waiter lifted the silver lid to reveal one gray rock. Over in the corner, Eli Lilly and Exxon split the bill, tipped well, and asked if anyone was going to finish that diesel.

If you own a plain index fund, you lost about $6 per $1,000 this week, when the most valuable tech companies on earth took a beating. That's the good news, and the average company is the reason. The stuff that hits your wallet directly went in opposite directions: borrowing for a house got a little cheaper, and anything that runs on diesel didn't.

What changed is that AI stopped getting a free pass. Companies aren't being punished for spending. They're being punished for spending without showing when the cash comes back. That's a healthier question than the market was asking in June. It's also a question that doesn't go away after one rough Friday.

The one question that decides next week: when Apple reports Monday, and AMD reports Tuesday, does the money come back to tech, or keep walking across the street?

Then there's a midterm election, a jobs report, and Iran. Happy November.

The decorations will come down eventually. The bill for them won't. Check your bag before you leave the porch.

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Disclaimer: Tracking the Trade is for informational, educational, and mildly therapeutic purposes only. Nothing here is financial advice, a recommendation to buy or sell anything, or a promise that any house on your street has candy. Past performance does not predict future results, and a large inflatable skeleton is not an asset class. Talk to a licensed professional before making money decisions. Please check all treats, and all forecasts before consuming.