Tech Stocks Rise a Third Day as Microsoft, Alphabet and Fed Converge

Technology shares extended their recent advance Wednesday as investors positioned ahead of one of the busiest afternoons of the earnings season. Microsoft and Alphabet are scheduled to report after the close, and the Federal Reserve is set to announce its rate decision at 2 p.m. ET. The central question hanging over all of it is whether AI-related revenue is growing fast enough to justify the enormous infrastructure budgets these companies are committing.

Early Session: Chips Up, Oil Also Up

Semiconductors led the morning advance, though rising crude prices added a complicating layer to the inflation outlook.

The S&P 500 and Nasdaq opened modestly higher, with the technology sector doing most of the early lifting, according to Yahoo Finance market coverage. Nvidia, AMD, and Broadcom were among the notable movers, supported by reports of a sharp profit increase at South Korea’s SK Hynix that reinforced confidence in AI-driven chip demand. The exact magnitude of the SK Hynix profit increase requires confirmation against the company’s official earnings release before publication. Reuters attributed the broader market move to renewed enthusiasm for AI ahead of the two mega-cap reports.

Oil prices added a complicating factor. Brent crude and WTI were both reported higher, though the specific intraday prices cited in early coverage require verification against a live commodities feed before publication. Higher energy costs feed inflation expectations, which can reduce the likelihood of rate relief and apply pressure to growth stocks.

The Fed Decision

Markets priced less than a 10% chance of a rate increase at the October meeting, according to the CME FedWatch tool as reported by CNBC and Charles Schwab, making the statement itself almost secondary.

With a hold broadly expected, investor attention is likely to center on Fed Chair Kevin Warsh‘s press conference and any signal about December policy direction. CNBC reported that markets were already positioning for a possible hike later in the year. Any hint of hawkish intent from Warsh could pressure technology valuations by raising the discount rates applied to future earnings. A measured, less restrictive tone would likely support long-duration assets like technology shares. Both outcomes remain investor interpretation rather than confirmed policy signals, and Warsh’s title should be verified against the official Federal Reserve website before publication.

Microsoft and Alphabet

AI monetization and capital spending are the figures investors are watching most closely in tonight’s results.

The durability of the technology sector’s advance may hinge on what these two companies say about cloud growth and AI revenue. Microsoft’s Azure cloud growth was previously reported at 43% year over year. Company guidance pointed to roughly 45% constant-currency growth for the reported quarter, per Charles Schwab. Yahoo Finance also reported that Microsoft offered buyouts to as many as 60,000 employees while expanding AI infrastructure; that figure has not been independently confirmed and should be verified against a Microsoft source or a directly attributable report before publication.

Alphabet faces a more difficult comparison. Google Cloud had previously grown 82% year over year, per Charles Schwab, setting a high bar for the new results. Expected 2026 capital spending was reported at roughly $195 billion to $205 billion, up from an earlier estimate of $180 billion to $190 billion, according to Admiral Markets; both ranges should be confirmed against Alphabet’s official earnings materials. The investor divide is straightforward: optimists believe AI revenue is scaling fast enough to absorb that spending, while skeptics argue the budgets are growing faster than the returns. The ongoing debate around data center costs and resource demands adds further context to those concerns.

What to Watch After the Close

The clearest signal tonight will be how management teams characterize AI monetization relative to infrastructure costs, not just the headline earnings number.

Strong cloud growth and credible AI revenue would reinforce confidence in 2027 capital spending plans and support the semiconductor rally. Disappointing results, or guidance suggesting further spending without clear revenue justification, could bring renewed scrutiny to the AI infrastructure investments that have led the recent advance.