Markets spent the week wrestling with three overlapping stories: an AI capex reality check, an energy-driven inflation squeeze, and central banks that still want to hike into it.
The biggest shift came in tech. Research flagged the first hyperscaler capex guides that missed expectations, with Alphabet and Amazon posting eye-watering spending against negative or shrinking free cash flow. Several analysts argued investors are no longer asking whether AI works, but who pays — and at Treasury yields near 5%, that question has a price. The result: a sharp growth-to-value rotation, four of the Magnificent Seven in bear markets, and roughly $4 trillion wiped from mega-cap tech.
Energy made things harder. With Brent near $118 and gasoline at $4.20, published work tied the hot 0.5% September PCE print directly to crude, pushing December hike odds to 74–85%. The Fed held with two hawkish dissents; the BOJ held at 1.25%; researchers widely expect December hikes from all three.
Looming over it: US midterms on November 3rd, with analysts flagging fiscal and geopolitical tail risks either way.