Earnings Onslaught. Stocks ended Wednesday's session higher after a busy day on Wall Street that included Oracle's investor day and the Federal Reserve's interest rate decision. Microsoft and Alphabet topped it off by releasing earnings after the closing bell.
The Nasdaq Composite added 0.3% and the S&P 500 gained 0.3%. The Dow Jones Industrial Average was up 0.2%, or 97 points.
Equities saw a midday bump after Oracle said it expected its free cash flow to rebound into positive territory in the second half of fiscal year 2028. That's sooner than consensus estimates previously suggested, and the stock popped nearly 11%, fueling an intraday bounce in the major indexes.
The Fed didn't move interest rates one way or the other. It was effectively a non-event for equities since a hold was priced in. However, bond yields did drop on the announcement. Big bond moves have become the norm in the Kevin Warsh era.
Alphabet and Microsoft released earnings in the early evening, sending their respective stocks moving in opposite directions in after hours trading. The Google parent company's results fell short of Wall Street's expectations, and Alphabet stock plunged. The stock was on track for its largest decline in more than three years, according to Dow Jones Market Data. By contrast, Microsoft stock rose after its initial report, which beat on the top and bottom lines.
Tomorrow will bring more earnings with several stocks tied to the AI trade, including Amazon, Caterpillar, Intel, and Sandisk.
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Thanks for the Memories
It's memory chipmakers' world, we're just living in it.
That fact was on full display Wednesday as the AI industry's unrelenting demand for memory chips sent the stocks skyrocketing.
SK Hynix's American Depository Receipts added more than 13% after the company reported its sixth straight quarter of record revenue and earnings. The South Korean chipmaker signaled that memory demand will outpace supply until 2030, assuaging any worries that inventories could quickly catch up over the short term. In fact, that reassurance was enough to lift the whole memory sector.
The Roundhill Memory ETF gained 7.1% to clock its best day in more than two months. The ETF, which trades under the ticker of "DRAM," has nearly doubled since its inception in April of this year.
Sandisk rose 7.7%, adding to its roughly 490% year-to-date gain. Yes, you read that correctly. The stock is worth six times what it was valued at the start of the year. Micron added 5.9%. Its stock has tripled in 2026 year to date.
But be warned: The AI trade is a zero-sum game, and good news for memory chipmakers translates into higher costs for other parts of the AI ecosystem. Microsoft CFO Amy Hood addressed that very issue on the company's earnings call Wednesday.
"Roughly three-quarters of our CapEx was for short-lived assets, primarily CPUs and GPUs, including higher memory and storage costs, as we continue to invest in the infrastructure required for our customers to build and scale AI applications," she said.
That means that as stocks like SK Hynix and Sandisk rise to new heights, investors should expect hyperscalers like Amazon, Microsoft and Alphabet will shoulder the costs.
The Calendar
Alliant Energy, Altria Group, Amazon.com, Ameriprise Financial, Anheuser-Busch InBev, A.O. Smith, Ares Management, Arthur J. Gallagher, Avery Dennison, Baxter International, Bristol Myers Squibb, Bunge Global, Carrier Global, Caterpillar, Cognizant Technology Solutions, Coinbase Global, DaVita, DexCom, Digital Realty Trust, D.R. Horton, Edison International, Eli Lilly, Emcor Group, Erie Indemnity, FedEx Freight Holdings, First Solar, Gilead Sciences, GoDaddy, Hershey, Howmet Aerospace, Huntington Ingalls Industries, Illumina, Incyte, Ingersoll Rand, Intel, Intercontinental Exchange, Kimco Realty, L3Harris Technologies, Linde, Mastercard, Merck, Mondelez International, Monolithic Power Systems, Norwegian Cruise Line Holdings, Quanta Services, Reddit, Republic Services, ResMed, Roblox, Sandisk, Shell, Starbucks, Stryker, Textron, TotalEnergies, T. Rowe Price Group, Trane Technologies, Twilio, Veralto, Vulcan Materials, WEC Energy Group, West Pharmaceutical Services, Weyerhaeuser, and Xcel Energy announce quarterly results tomorrow.
The Bureau of Economic Analysis releases the personal consumption expenditures price index for September. Economists forecast a 3.6% year-over-year increase, two-tenths of a percentage point more than in August. The core PCE price index, which strips out volatile food and energy prices, is expected to rise 3.1%, compared to 3% previously.
The BEA releases its advance estimate of third-quarter gross-domestic-product growth. Consensus estimate is for a seasonally adjusted annual rate of 3.2%, a full percentage more than in the second quarter.
-- Dan Lam
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