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S&P 500 Falls 0.5% as Big Tech Earnings, Fed Test AI Rally
Why did the S&P 500 fall 0.5% on Friday?
The S&P 500 (SPX) fell 0.52% to 7,623.68 on Friday as doubts over paying for AI spending and a jump in oil weighed ahead of big tech earnings and the Fed.
Key numbers
| S&P 500 close (Fri) | 7,623.68-0.52% |
|---|---|
| Nasdaq (Thu) | -2.6%Worst day since June |
| S&P 500 YTD | ~12%Gain in 2026 |
| Q3 S&P 500 earnings growth | 32%+Expected vs year ago |
| Hyperscaler AI spending | ~$800BExpected for 2026 |
| Fed hike odds, December | ~80%vs ~5% on Wednesday |
What happened
The S&P 500 (SPX) fell 0.52% to 7,623.68 on Friday as doubts over paying for AI spending and a jump in oil weighed ahead of big tech earnings and the Fed. The slide followed Thursday, when the Nasdaq dropped 2.6%, its worst day since June, after Meta and chipmaker Lam Research disappointed investors. For the week, the S&P 500 lost 0.5%. This week, about a third of S&P 500 companies report, including Alphabet and Microsoft on Wednesday and Amazon on Thursday.
Why it matters
The S&P 500 tracks 500 of the biggest US companies and is up about 12% this year, so its swings reach many retirement accounts. This week shows whether the big AI spenders are earning enough to justify roughly $800 billion of planned spending. The Fed also meets Wednesday. Traders see about a 5% chance of a rate hike then, but about 80% in December, which could mean higher borrowing costs.
Who this affects
- MarketmixedHigh impact
- Stock investors face big swings; confidence in AI trade is shaky.
- CompanyneutralHigh impact
- Reporting companies face tough questions on AI spending returns.
- CompetitorsbearishMedium impact
- Meta and chip stocks already sold off on AI doubts.
- IndustrymixedHigh impact
- Cloud and AI firms must prove spending pays off.
Alphabet vs Microsoft, Amazon
| AlphabetGOOGL:NASDAQ | Wed, Oct 28 | ~$3.00 | $127.8B |
|---|---|---|---|
| MicrosoftMSFT:NASDAQ | Wed, Oct 28 | ~$4.72 | $90.8B |
| AmazonAMZN:NASDAQ | Thu, Oct 29 | ~$1.96 | $202.2B |
As of 2026-10-25
How we got here
Nasdaq falls 2.6%, worst day since June, after Meta and Lam Research results.
S&P 500 ends down 0.52% as oil hits highest since late April.
Fed decision at 2 p.m. ET; Alphabet and Microsoft report after the close.
Amazon reports after close; GDP and PCE inflation data due that morning.
What to watch
- Cloud growth and 2026 spending plans in Alphabet and Microsoft results2026-10-28
- Fed Chair Warsh's comments on a possible December rate hike2026-10-28
- Amazon results and September PCE inflation reading2026-10-29
Educational content only. Not investment advice.
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