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AI’s spending scare is haunting markets this Halloween. Strong cloud growth is failing to reassure investors as Google, Amazon, Microsoft and Meta pour enormous sums into infrastructure. Falling free cash flow, growing financing needs and credit stress are raising questions about when those investments will pay off. Amazon also faces a potential challenge from AI shopping agents. Meanwhile, central banks are keeping further rate hikes on the table as elevated energy prices complicate the inflation outlook. From Big Tech earnings to monetary policy and stronger US growth, financial conditions are tightening, and markets are beginning to feel the pressure again....

Big spending, mixed rewards: Microsoft and Google delivered strong cloud growth, but investors reacted very differently to their cash flow numbers. Why?

Meanwhile, the Federal Reserve left rates unchanged but kept another hike firmly on the table as energy inflation threatens to spread. Markets found some breathing space, yet borrowing costs remain a challenge.

In Europe, attention turns to the ECB and Christine Lagarde’s response to mounting French sovereign bond stress. Will tighter financial conditions reduce the need for further rate hikes? And could reassurance about fragmentation support equities and the euro?

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Ipek Ozkardeskaya has...

AI appetite is back, but the bills keep growing. Anthropic’s IPO filing, strong demand for Meta’s share sale and SK Hynix’s operating profit beat have revived enthusiasm ahead of the Fed decision and Microsoft and Google earnings. With inflation coming in firmer than expected, investors will scrutinise the Fed’s message for clues about another rate hike. Meanwhile, Big Tech must show that strong cloud growth can justify soaring AI investment. We discuss interest rates, elevated oil prices, the yield curve and why attractive bond yields raise the bar for investors still willing to pay up for the ambitious AI dream....

Tech stocks rebound as Anthropic’s IPO filing revives appetite for AI enablers. But investors are still questioning the scale of AI infrastructure spending, rising financing needs, circular deals and whether future revenues will justify the investment. Meta’s fundraising plans and chip suppliers’ interest in buying its shares bring those concerns into focus. Meanwhile, a major website security scare highlights both the opportunities and risks AI presents for cybersecurity. With Microsoft, Alphabet and Amazon due to report earnings, can strong cloud growth reassure investors — or will concerns about spending continue to overshadow the results? We also look at France and...