Support Fed holds, BoC hikes as Microsoft beats and Alphabet misses
The Federal Reserve held US interest rates at 4.00%, while the Bank of Canada raised rates to 2.50%. Meanwhile, Microsoft beat quarterly corporate earnings expectations, whereas Alphabet missed estimates.
Fed holds interest rates steady at 3.75%–4.00%, citing strong US economic growth and elevated inflation.
Bank of Canada hikes its benchmark rate by 25 basis points to 2.50% to curb rising inflation.
Microsoft beats forecasts, generating revenue of $92.28 billion and earnings per share of $4.89.
Alphabet misses quarterly earnings estimates, recording revenue of $127.58 billion and EPS of $2.12.
Date: 29 October 2026 (GMT+3)
Fed holds benchmark interest rate steady at 4%; US stocks advance
The Federal Reserve (Fed) decided to hold its benchmark interest rate steady within the 3.75%–4.00% range, in line with analysts' expectations. The decision passed by a 10–2 vote, with two dissenters voting in favour of a 25-basis-point interest rate hike: Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack.
During the Fed's press conference, Chairman Kevin Warsh pointed out that the Federal Open Market Committee (FOMC) observes strong economic growth in the United States, driven particularly by solid private investment and domestic consumption. In turn, FOMC members consider employment to have remained resilient, although the rate of inflation remains elevated.
Against this backdrop, Warsh acknowledged that inflation has remained well above the Fed's 2.0% target for more than five years, stating that returning it to target is their primary focus. Additionally, Warsh noted that the central bank has made clear its willingness and readiness to act.
Notably, Chairman Warsh emphasised that the US central bank will not provide forward guidance regarding interest rates, and that future decisions will be made strictly on a data-dependent basis.
In response, US equity benchmarks rose in tandem following a relatively neutral stance from the Federal Reserve, which had adopted a more restrictive tone in recent meetings. The S&P 500 index advanced by 0.28% to 7,743 points, the Dow Jones Industrial Average increased by 0.19% to 52,480, and the Nasdaq 100 rose by 0.55% to 29,813 points. Conversely, the US Dollar Index (DXY) declined by 0.21% to 102.15 points.
However, although equity markets exhibited positive sentiment, market movements were measured. Market participants may be awaiting key economic indicators scheduled for publication later this week, namely the Personal Consumption Expenditures (PCE) Price Index and the third-quarter (Q3) Gross Domestic Product (GDP) growth rate.
BoC decides to increase benchmark interest rate, in line with analysts' expectations
The Bank of Canada (BoC) decided to increase its benchmark interest rate by 25 basis points to 2.50%, marking its first interest rate hike since July 2023. This monetary policy move was in line with analysts' expectations. Currently, the BoC is confronting a rising headline inflation rate, which has reached 3.1%—exceeding the central bank's target control range of 1%–3%.
Notably, the BoC indicated that it expects inflation to average 3.0% in 2027 before easing to 2.0% by mid-2028, as cited by Trading Economics.
Following the BoC's decision, the Canadian dollar appreciated by 0.38% against the US dollar, with the USD/CAD currency pair closing near 1.3992.
Figure 1. Canada Interest Rate (2021–2026). Source: Data from the Bank of Canada; figure retrieved via Trading Economics.
Microsoft beats quarterly estimates while Alphabet falls short of forecasts
Mega-cap technology giants Microsoft and Alphabet delivered mixed quarterly earnings results. While Microsoft exceeded analysts' expectations on both total revenue and earnings per share (EPS), Alphabet fell short of forecasts.
On the one hand, Microsoft (MSFT) reported revenue of $92.28 billion, surpassing the market forecast of $90.62 billion. The technology giant reported earnings per share of $4.89, exceeding analysts' estimates of $4.71. These results represent year-on-year (YoY) revenue growth of 18.81% and an annual increase of 18.40% in EPS. Consequently, Microsoft shares advanced by approximately 3% in extended trading.
On the other hand, Alphabet (GOOGL) reported total revenue of $127.58 billion, slightly missing analysts' forecasts of $127.96 billion. Meanwhile, the company recorded EPS of $2.12, falling short of the market consensus estimate of $3.01. These figures represent a YoY revenue growth rate of 24.60% alongside an annual contraction of 26.00% in EPS. In response, Alphabet shares fell by approximately 10% in extended trading.
