Federal Reserve Holds Benchmark Rates Steady as Tech Earnings Loom

Federal Reserve Holds Benchmark Rates Steady as Big Tech Earnings Loom

The Federal Reserve decided to hold its benchmark interest rate steady, central bank policymakers announced on Wednesday, Oct. 28, 2026, as investors digested a round of hyperscaler earnings, CNBC reported.

The pause follows a quarter-percentage-point hike issued by the Federal Open Market Committee in September. Central bank policymakers stated that inflation remains elevated while noting the committee is awaiting the accumulation of more information before taking further steps, according to CNBC.

Alphabet Shares Drop Following Negative Free Cash Flow and Capital Expenditure Forecast

Alphabet shares tumbled 10.38% in premarket trading after Google’s parent company missed expectations on adjusted earnings per share and revenue in the third quarter, CNBC reported. The company posted negative free cash flow of $9.07 billion while maintaining its full-year capital expenditures forecast at $195 billion to $205 billion.

According to Yahoo Finance reporting, Alphabet spent $51 billion on data centers and equipment in the quarter, more than double its spending from a year earlier. To cover the cash gap, Alphabet bought back no stock, sold approximately $29 billion of bonds and $12 billion of new shares, and nearly tripled its long-term debt this year to about $125 billion.

Microsoft Cloud Infrastructure Growth Drives Revenue Beats as OpenAI Payments Rise

In contrast to its industry peer, Microsoft shares rose 3.73% in premarket trading after reporting beats on top and bottom lines for the fiscal first quarter, driven by growth in its Azure cloud infrastructure business, CNBC reported. OpenAI paid Microsoft $10 billion in the quarter that ended in September, accounting for about 11% of Microsoft’s $92 billion in revenue, according to Yahoo Finance.

Yahoo Finance noted that OpenAI’s unpaid bills to Microsoft climbed to about $7 billion from $6 billion three months earlier, while Microsoft’s overall backlog slipped to approximately $677 billion and new bookings fell 12% from a year earlier.

Janus Henderson Investors Views Central Bank Decision as Patient Rather Than Dovish

Daniel Siluk, head of global short duration and liquidity at Janus Henderson Investors, told CNBC that the central bank’s rate decision can be interpreted as mildly dovish at the margin but is best viewed as an expression of patience rather than a shift away from a tightening bias. Siluk added that the door remains open to further tightening while the committee waits for incoming data.

Markets face further economic data on Thursday with the release of the Personal Consumption Expenditures price index report for September, alongside the first reading of third-quarter gross domestic product and weekly jobless claims, CNBC reported.

Frequently Asked Questions About the Fed Rate Decision and Big Tech Earnings

What caused Alphabet’s steep premarket share decline?

Alphabet shares fell 10.38% in premarket trading after missing Wall Street expectations for adjusted earnings per share and revenue in the third quarter, alongside reporting negative free cash flow of $9.07 billion, according to CNBC.

How much did OpenAI pay Microsoft during the September quarter?

OpenAI paid Microsoft $10 billion during the quarter ending in September, which represented about 11% of Microsoft’s $92 billion in total quarterly revenue, Yahoo Finance reported.

Where did the Federal Reserve set its benchmark interest rate in October 2026?

The Federal Open Market Committee left the benchmark interest rate unchanged in a target range between 3.75% and 4% following its October meeting, CNBC reported.

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