US stocks shrug off Fed uncertainty to make progress, Amazon stands out

Overall, it was a positive week for most US indices despite the latest decision from the Federal Reserve injecting a dose of uncertainty into the markets.

The one big exception to a story of steady progress for stocks across the Atlantic was the small- and mid-cap Russell 2000 which retreated amid some evidence of pressure on the US economy.

Fed chair Jerome Powell suggested a December rate cut, to follow the one announced on 29 October, was not a foregone conclusion, which upset markets a bit. Earnings from some of the big tech names got a mixed reception.

Both Apple and Microsoft delivered steady performance – with Apple getting a boost for a strong reception for the new iPhone 17 and Microsoft enjoying robust growth in cloud computing. Global freight broker CH Robinson was in demand as its use of AI helped quarterly profit beat expectations.

Casual dining chain Chipotle Mexican Grill was feeling the heat as it lowered its sales forecast for the third time this year as people skip dining out thanks to pressures on household finances.

Amazon

Strong growth in Amazon’s cloud infrastructure technology business unit AWS helped drive a revenue and earnings beat for the tech giant in the three months to the end of September.

The shares, which have lagged other Magnificent Seven names in 2025 jumped more than 12% in the after-market on 30 October, pushing them back into positive territory for the year.

CEO Andy Jassy said: ‘AWS is growing at a pace we haven’t seen since 2022.

‘We continue to see strong demand in AI and core infrastructure, and we’ve been focused on accelerating capacity — adding more than 3.8 gigawatts in the past 12 months.’

Amazon reported revenue of $180.17 billion compared with consensus estimates of $177.8 billion and EPS of $1.95 which was comfortably ahead of the $1.57 forecast by analysts.

The company raised its projection for capital expenditure to $125 billion in 2025, from a prior estimate of $118 billion and said the number will increase again in 2026.

Meta Platforms

Facebook owner Meta Platforms dropped 11% on 30 October after the company booked an unexpected one-off $16 billion tax charge for the third quarter.

Excluding the charge, which was related to President Trump’s ‘Big Beautiful Tax Bill’, EPS (earnings per share) came in at $7.25 versus consensus estimates of $6.69 as revenues increased 26% year-on-year to $51.24 billion.

The share price fall also reflected investor concerns about Meta’s plans to ramp up capital expenditure on AI. The estimate for 2025 was pushed up to a range of $70 billion to $72 billion with ‘notably larger’ spending anticipated in 2026.

The company anticipates total costs will also grow significantly faster, putting pressure on margins.

CEO Mark Zuckerberg said: ‘We’re seeing the returns in the core business that’s giving us a lot of confidence that we should be investing a lot more, and we want to make sure that we’re not under investing.’

The shares are up around a third so far in 2025 compared with a 24% increase in the Nasdaq Composite index.

Alphabet

Google parent Alphabet got a positive reception from investors with the shares gaining nearly 3% to a new high on 30 October after the company reported third quarter earnings and revenues ahead of market expectations.

Revenue increased by 16% to $102.4 billion, topping the $99.85 billion consensus forecast while adjusted EPS increased 35% to $2.87 compared with the $2.27 projected by analysts.

Sales growth was driven by a 34% increase in Google Cloud related to strong enterprise demand for AI. CEO Sundar Pichai said: ‘We have signed more deals over $1 billion through Q3 this year than we did in the previous two years combined.’

Alphabet lifted its projection for full year capital expenditures to $92 billion, up from its previous estimate of $85 billion as demand for AI infrastructure continued to outstrip supply.

Despite perceived risks to Google’s core search business from AI models like ChatGPT, Alphabet’s own AI model Gemini has garnered more than 650 million monthly active users.

Post quarter end AI rival Anthropic announced an agreement with Google Cloud to use up to one million custom AI chips, which Bank of America believes could generate around $10 billion in annual revenue for Alphabet.