SCL

By Mark DeCambre

GDP and inflation figures arrive together at 8:30 a.m. Eastern. Strong growth and persistent price pressures could strengthen the case for an interest-rate increase in December.

Fed Chairman Kevin Warsh is awaiting this morning's economic data.

👋🏽Hello, MarketWatchers! Here's the question I'm pondering this morning: Is it possible to double a business and still disappoint Wall Street? Ask Alphabet.

Google's parent reported that its cloud revenue more than doubled, but investors were more concerned about the cash it's spending on AI, and whether artificial intelligence could threaten the search business that funds it all.

Meanwhile, Microsoft offered a different picture. Its Azure cloud business generated $33.2 billion in quarterly revenue, up 48% from a year earlier, while the tech giant delivered $18.6 billion in free cash flow.

That contrast is striking. Wall Street still loves AI growth. We're learning that it's increasingly sensitive about what that growth costs.

And remember how Federal Reserve Chairman Kevin Warsh said Wednesday that the central bank was awaiting more info before deciding whether another interest-rate hike was necessary to quell inflation? He was likely referring to today.

The Fed's preferred inflation measure, the PCE price index, will be released alongside the first reading of third-quarter economic growth. A strong economy and stubborn inflation could strengthen an already compelling case for a rate increase in December.

Warsh and company stood still yesterday. Today's numbers could help determine how much longer the Fed can afford to.

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Three stories worth your time ...

-- Americans are stretched thin. Borrowing money isn't getting any cheaper.

-- The cost of caring for an aging parent or loved one has risen 60% in five years.

-- Healthcare stocks are on their hottest streak in 25 years. Is it too late to buy?

On markets: Wall Street is headed for a mixed open. Nasdaq-100 futures are down about 1% in premarket trades, and the S&P 500 looks softer, while Dow futures are edging higher. Big Tech earnings are setting the tone.

Stocks to watch: Amazon reports quarterly results after the closing bell, with investors looking beyond its cloud business for signs that its own AI investments are paying off. Fortinet shares are falling after its results raised concerns about slowing growth in cybersecurity. And Marvell Technology is close to buying Lumentum, according to Bloomberg News, which cited unnamed people familiar with matter.

-- Follow our live markets coverage for the latest developments.

Elon, phone home?

Could Elon Musk take on Verizon (VZ)? The SpaceX (SPCX) and Tesla (TSLA) chief says he can build a nationwide wireless carrier in two to three years. Verizon's boss isn't so sure, and analysts say the undertaking could cost more than $100 billion.

MarketWatch's William Gavin examines what would actually take to put up a challenge to America's wireless giants.

Realistic travel tips ...

🧳Can you trust a travel influencer with your vacation budget? One MarketWatch reader planning an affordable Europe getaway wonders whether social-media recommendations are worth following. Many of those dreamy trips are effectively advertisements masquerading as tips, and the price tags can be eye-watering.

But our advice columnist Aditi Shrikant explains why influencers can still be useful, providing you take their recommendations with a grain of salt.

Who's the bad neighbor?

The Moneyist.

🛠?Feeling like they were being taken advantage of, a couple stopped helping their neighbors with home repairs, and a decades-old friendship cooled. Who's to blame? The Moneyist says that, while the relationship sounds transactional, even the best friendships can erode. And sometimes neighbors need a little space.

It's all about affordability ...

💵Younger voters tell MarketWatch that affordability issues - not social issues - are most important to them in the upcoming midterm elections. It's more about economic top-versus-bottom than left-versus-right, one 24-year-old says. Vanessa Wong explores this political shift, as Gen Z feels more life goals are becoming unattainable.

-- The ultrarich are opting for a 7% mortgage instead of paying in cash.

-- Is Nvidia's Jensen Huang the target of an elaborate Chinese spy plot?

-- Chip companies are having their revenge on Apple after years of being bullied by the iPhone maker, the Wall Street Journal reports.

About me

Mark DeCambre is editor in chief of MarketWatch. He has spent more than 20 years covering Wall Street, markets and personal finance, and writes Need to Know, drawing on the award-winning analysis and journalism of the newsroom.

-Mark DeCambre

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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10-29-26 0711ET