Big Tech Earnings Drive Market Sentiment, Fed's December Rate-Cut Less Likely

Barry Adams
30 Oct, 2025
New York City

Wall Street indexes struggled to advance after Big Tech earnings delivered mixed signals. 

The S&P 500 index edged lower 0.3%, and the tech-heavy Nasdaq Composite decreased 0.5% following earnings results from Microsoft, Alphabet, Meta Platforms, Chipotle Mexican Grill, and Starbucks.  

Meta Platforms took a one-time non-cash charge of multiple billions of dollars, reflecting changes in how deferred tax assets are accounted for under the revised tax code. 

Microsoft Corp. eased after the company's earnings took a hit because of elevated AI-related spending, raising worries that future AI spending growth may face hurdles.  

The yield on 10-year Treasury notes edged up to 4.11%, a day after the Federal Reserve lowered its fed funds rate range by 25 basis points to between 3.75% and 4.0%. 

Fed Chair Jerome Powell signaled that there are uncertainties surrounding a possible rate cut after the December meeting amid a federal government data blackout and weakening labor market.  

The U.S. and China agreed to ease trade restrictions and roll back some of the duties, following a meeting between leaders of the two nations. 

Trump announced reducing fentanyl tariffs on Chinese goods to 10%, lowering overall tariffs to 47% from 57%. 

Xi Jinping said China will delay the latest trade restrictions on rare-earth shipments by one year but will keep in place the curbs announced in April.  

 

U.S. Stock Movers 

Chipotle Mexican Grill Inc. plunged 19% to $39.76, and the restaurant company lowered its same-store sales outlook for the third consecutive quarter. 

Total revenue in the third quarter increased 7.5% to $3.0 billion from $2.8 billion, net income decreased to $382.1 million from $387.4 million, and diluted earnings per share rose to 29 cents from 28 cents a year ago. 

"The increase in total revenue was driven by new restaurant openings and a 0.3% increase in comparable restaurant sales due to a 1.1% increase in average check, partially offset by lower transactions of 0.8%. Digital sales represented 36.7% of total food and beverage revenue," said the burrito chain operator in a statement to investors.

The company lowered its same-store sales growth outlook in 2025 to the low single-digit range from February's estimate of an increase in the low to mid single-digit percentage. 

The company confirmed that its core customers between the ages of 25 and 35 years are visiting its stores less frequently. 

Alphabet Inc. Class C jumped 7.4% to $295.09, and the parent company of Google and YouTube reported better-than-expected third-quarter results. 

Revenue increased 16% to $102.4 billion from $88.3 billion, net income advanced 33% to $34.97 billion from $26.3 billion, and diluted earnings per share rose 35% to $2.87 from $2.12 a year ago. 

"The Gemini app now has over 650 million monthly active users. We continue to drive strong growth in new businesses. Google Cloud accelerated, ending the quarter with $155 billion in backlog. And we have over 300 million paid subscriptions led by Google One and YouTube Premium,” said CEO Sundar Pichai.

Google Search & other, YouTube ads, Google subscriptions, platforms, and devices, and Google Cloud each delivered double-digit growth in the third quarter. 

Google Services revenues jumped 14% to $87.1 billion, reflecting robust performance across Google Search, subscriptions, and YouTube advertising. 

Google Cloud revenues soared 34% to $15.2 billion, led by growth in Google Cloud Platform across core products, AI infrastructure, and generative AI solutions. 

Meta Platforms Inc. decreased 8.8% to $686.0, despite the parent company of Facebook and Instagram reporting better-than-expected revenue and earnings in the third quarter. 

Revenue surged 26% to $51.2 billion from $40.6 billion, net income plunged 83% to $2.7 billion from $15.7 billion, and diluted earnings per share decreased to $1.05 from $6.03 a year ago. 

The decline in net income was driven by a one-time non-cash income tax charge of $15.93 billion because of the decline in valuation allowance against the company's deferred tax assets. 

The company held out for lower annual income tax expense starting next year, resulting from changes announced in the latest U.S. government budget.

Microsoft Corp. decreased 2.2% to $529.70, and the software and cloud services provider reported mixed results in the fiscal first quarter ending in September.  

Revenue increased 18% to $77 billion from $65 billion, net income advanced 12% to $27.7 billion from $24.7 billion, and diluted earnings per share rose to $3.72 from $3.30 a year ago.  

Revenue in the cloud segment rose 26% to $49.1 billion, personal computing advanced 4% to $13.8 billion, and the productivity and business processes unit advanced 17% to $33 billion. 

Microsoft returned $10.7 billion to shareholders in the form of dividends and share repurchases in the first quarter of fiscal year 2026.