Market Volatility: Fed Split, Big Tech Earnings Shake Markets
The Federal Reserve kept its benchmark interest rate unchanged at 3.50%, 3.75%, but it was clear that investors were on edge. Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan each preferred a quarter-point hike, creating a rare split among policymakers.
When asked what would trigger a rate hike, Fed Chair Kevin Warsh declined to specify but described the disagreement as 'a good family fight.' This ambiguous response left investors with more questions than answers.
The bond market took matters into its own hands. The 30-year yield rose 12 basis points to 5.21%, its highest since 2007, while the two-year yield fell four basis points. Long rates up, short rates down: traders pushed the hike further out and kept pricing the inflation problem.
Meanwhile, tech giants took center stage with their earnings reports. Microsoft rose 15.5% on Thursday, its best session since 2008, after beating expectations. Azure revenue passed $100 billion for the first time in fiscal 2026, up 41%, and management left calendar-year capital spending guidance unchanged at roughly $175 billion.
Amazon did the opposite, lifting its 2026 capital expenditure plan to about $220 billion from $200 billion. The stock gained 16.87% on the week, its best since April 2015, driven by AWS growth of 36.7% year over year, the fastest pace in 18 quarters.
Apple, however, fell roughly 8% on Friday after reporting record fiscal third-quarter revenue and earnings but lowering guidance due to soaring DRAM and NAND prices. Intel closed down 33.74%, its worst month since September 2000.