Ray: Good morning, this is Biscuits and Tickers for Thursday, October twenty-ninth. I'm Ray.

Nora: And I'm Nora. Big Tech earnings split the market overnight. Alphabet is sinking more than ten percent before the bell after a rare profit miss and a second straight quarter of negative free cash flow, while Microsoft is higher on strong cloud growth. Plus, the Fed held rates, and today brings GDP, the PCE inflation gauge, an E C B decision, and Amazon after the close.

Ray: Here's the board. On Wednesday the S and P 500 rose about three tenths of a percent to close at 7,743.98, according to AP. The Nasdaq Composite also gained about three tenths, and the Dow added two tenths. The Nasdaq 100 finished at 29,813.

Nora: This morning the picture flips for tech. Nasdaq 100 futures are down roughly one percent, per Reuters. Pre-market trading in the big index funds points to the S and P 500 opening down a bit less than half a percent, the Dow down about four tenths, and small caps in the Russell 2000 slightly higher. The VIX volatility index is at 17.1.

Ray: In bonds, the 10-year Treasury yield is hovering right around 5 percent after briefly touching about 5.04 percent Wednesday. The 2-year yield eased to about 4.69 percent, from above 4.77 percent, according to AP. The dollar is steady at about 157.9 yen, and the euro is near 1.1155 dollars.

Nora: Oil is easing. Brent crude is down about eight tenths of a percent at roughly 110.8 dollars a barrel, and U.S. crude is off about one percent near 101.7 dollars. That's still far above the roughly 72 dollars Brent fetched before the Iran war began in late February. AP notes U.S. officials have warned that renewed military action against Iran could come after next Tuesday's midterm elections. Bitcoin is weaker, with the largest spot bitcoin fund down nearly 2 percent pre-market.

Ray: Overseas, Japan's Nikkei rose 1.1 percent, but South Korea's Kospi fell 1.2 percent as Samsung Electronics dropped about 4 percent, with investors disappointed by its shareholder return plan. Taiwan fell 1.4 percent and Hong Kong slipped. In Europe, Germany's DAX is up about eight tenths and France's CAC 40 is up about 1 percent.

Nora: It's a heavy calendar. The government is due to release the first estimate of third-quarter GDP and the September personal consumption expenditures report, which includes the PCE price index, the Fed's preferred inflation measure. Weekly jobless claims are also due. With oil elevated, the inflation number will get extra scrutiny.

Ray: In Europe, the European Central Bank announces its rate decision today. Convera notes markets price roughly 75 basis points of E C B hikes through the end of 2027. The Bank of Japan wraps up its meeting Friday and is expected to hold.

Nora: On earnings, Mastercard, Merck, Eli Lilly, Caterpillar, Bristol Myers Squibb, Altria, DoorDash, Hershey and Quanta Services reported this morning. After the close, the headliner is Amazon, ticker A M Z N, along with Intel, Coinbase, Reddit, Starbucks, Roblox, Gilead, First Solar, Pinterest, Mondelez, Rivian and Strategy.

Ray: Our top story: Alphabet, ticker G O O G L. The Google parent reported third-quarter revenue of 127.6 billion dollars, up 25 percent from a year ago. But earnings per share came in at 2 dollars 12 cents, well short of the roughly 3 dollars analysts expected, according to FinanceFeeds, citing the company's filing and consensus data. Part of that was an 8.7 billion dollar loss on equity securities, mainly its SpaceX stake.

Nora: The core worry is search. Search and other ad revenue was about 63.4 billion dollars, below estimates near 65 billion, and growth slowed to about 12 percent from 17 percent the prior quarter. YouTube ads also came in a bit light. Google Cloud was the bright spot, more than doubling to 30.7 billion dollars, with a backlog of 561 billion.

Ray: Then there's spending. Quarterly capital expenditures were 51.4 billion dollars. Alphabet kept its 2026 capex range at 195 to 205 billion dollars, and said spending will increase significantly in 2027. Free cash flow was negative about 9.1 billion dollars, a second straight negative quarter. CNBC and Reuters both flagged the cash burn as central to the reaction.

Nora: The stock is down more than 11 percent in pre-market trading. Reuters notes that if the drop holds, Alphabet would lose more than 400 billion dollars in market value, a big test of investor patience with AI spending.

Ray: Microsoft, ticker M S F T, told a different story. Azure grew 48 percent to 33.2 billion dollars, according to reporting cited by FinanceFeeds, and Reuters points to a big cash flow beat and a strong cloud growth forecast. Shares are up about one and a half to two percent pre-market. Taken together, the market is rewarding AI spending that is already showing up in cash flow, and punishing spending where the core business is slowing.

Nora: A quick follow-up on the Fed. As expected, policymakers held the federal funds rate at 3.75 to 4 percent, with two dissents, according to Convera. Chair Kevin Warsh stopped short of signaling a December move, said incoming data will decide the next step, and pushed back on the idea that the economy is overheating.

Nora: Even so, traders see more than an 81 percent chance of a rate hike in December, according to CME FedWatch, as cited by Reuters. Aberdeen's Jon Butcher called the hold a short pause ahead of a likely December hike.

Ray: Software is under heavy pressure. ServiceNow, ticker N O W, is down roughly 18 to 20 percent pre-market after missing third-quarter profit estimates. Fortinet, ticker F T N T, is down about 25 percent after its results. Reuters says Zscaler and Salesforce are also among the laggards.

Nora: In chips, Marvell Technology, ticker M R V L, is down about 12 percent after media reports said it is in advanced talks to buy data center optics maker Lumentum. Lumentum is up about 5 percent. Neither company has confirmed a deal.

Ray: More movers. Caterpillar, ticker C A T, is down nearly 10 percent after its third-quarter report, even though earnings per share topped estimates. Eli Lilly is up about 4 percent after forecasting annual revenue above estimates. Carvana is up about 7 and a half percent on a revenue beat, and Chipotle is up about 7 percent on better than expected same-store sales.

Nora: Semiconductors are mostly lower: Intel is down about three and a half percent ahead of its report tonight, AMD is down about two and a half, Micron is off about 3 percent following Samsung's slide, and Nvidia is down about one percent. Sector-wise, the pressure is concentrated in large-cap tech and software, while small caps are holding up better and European stocks are rising.

Ray: Here's what to watch today. The GDP and PCE inflation reports, and how Treasury yields react around the 5 percent level on the 10-year. The E C B decision and what it means for the euro. Whether the Alphabet selloff spreads to other AI spenders or stays contained. And after the close, Amazon's cloud and capex numbers, plus Intel and Coinbase.

Nora: Also keep an eye on oil, with Brent still above 110 dollars, and any headlines on Iran ahead of next week's midterm elections.

Ray: That's Biscuits and Tickers for Thursday, October twenty-ninth. This is information, not investment advice. I'm Ray.

Nora: And I'm Nora. See you tomorrow morning.