BiyaPay Market Watch | Market Divergence Intensifies, AI Investment Returns Become Key, Microsoft Earnings and Fed Meeting in Focus This Week

BiyaPay, a global one-stop asset allocation platform, market observations: The U.S. stock market showed clear divergence last week.

The Nasdaq and S&P 500 Index fell for the week, while the Russell 2000 Index rose against the trend. As AI capital expenditure continues to expand, investors' focus is shifting from growth expectations to more practical questions: How much capital have companies invested, and how quickly can they convert these investments into revenue, profit, and cash flow?

As of the close on October 23, the S&P 500 Index fell 0.47% for the week, the Nasdaq Composite Index fell 0.71%, the Dow Jones Industrial Average rose 0.41%, and the Russell 2000 Index rose 2.00%. The performance divergence among indices indicates that the market is not broadly turning to risk-off; capital is reassessing the growth quality and valuations of different companies.

Entering October 26–30, Microsoft, Alphabet, and Amazon will successively release earnings reports, and the Federal Reserve will also announce its interest rate decision. The subsequently released preliminary U.S. third-quarter GDP and September PCE inflation data may also affect the market's judgment on the interest rate path. Whether AI investment can deliver returns will become a focus this week alongside corporate earnings and the cost of capital.

1. Last Week's Review: The Market Did Not Weaken Across the Board; Capital Preferences Are Diverging

Meta Under Pressure: AI Investment and Cash Returns Become the Focus

Meta's third-quarter revenue grew 26% year over year, but its stock price came under pressure after the earnings report was released. Compared with revenue growth itself, the market is more focused on the company's continuously expanding AI infrastructure investment and the impact of these investments on cash flow and future profits.

Meta's operating cash flow for the quarter was $32.79 billion, and free cash flow was negative $2.12 billion. The company also adjusted its full-year capital expenditure guidance, revising the range from the previous $130 billion to $145 billion to $135 billion to $145 billion, raising the lower bound by $5 billion while keeping the upper bound unchanged.

This does not mean that Meta's advertising business has lost its growth momentum. More accurately, revenue growth and cash flow pressure coexist, reflecting that AI infrastructure construction requires substantial capital, and whether related investments can continuously improve advertising efficiency and bring in new revenue still needs to be verified by subsequent performance.

In addition, legal-related expenses during the quarter also affected profits. Therefore, when analyzing Meta's performance, profit changes cannot simply be attributed entirely to AI investment; instead, the impact of core business performance, one-time expenses, and capital expenditure should be examined separately.

What is worth watching next is whether AI can further improve advertising recommendation and delivery efficiency, whether new infrastructure can be converted into actual commercial revenue, and whether capital expenditure growth can gradually form more sustainable cash returns.

Tesla's Capital Expenditure Changes Also Need to Be Judged Alongside Business Progress

Tesla also faces a trade-off between investment and returns. The company previously adjusted its 2026 capital expenditure forecast to more than $20 billion, lower than the previous expectation of more than $25 billion.

The decline in capital expenditure expectations may ease some funding pressure, but it does not directly prove that operating efficiency has improved, nor can it be used to conclude that the company's investment in new businesses is slowing. It still needs to be judged comprehensively alongside project progress, revenue contribution, profit margins, and cash flow changes.

Meta and Tesla do not have the same business structure, and the purposes of their capital allocation also differ, but the situations of the two companies reflect a common trend: The market no longer looks only at how much companies invest, but pays more attention to when these investments will generate revenue, whether they can improve profitability, and how much cash they will ultimately leave for the company.

Software and Cybersecurity Stocks Diverged; the AI Trading Logic Is Still Adjusting

The AI industry chain is not a whole that can be valued using a single logic.

Hardware companies such as chip and server makers rely more on customer procurement, order delivery, and product cycles; software and cybersecurity companies need attention to customer renewals, paid scale, average revenue per user, and service costs. Growth in AI demand does not mean that all related companies can achieve the same revenue growth rate and profit margin.

Some stocks rebounded after adjustments, which may reflect valuation repair or capital reallocation, but this does not mean the fundamentals have improved. Judging whether the rebound can continue still requires observing indicators such as orders, revenue, customer demand, and profit margins.

Therefore, the importance of this week's earnings reports lies not only in whether companies can exceed market expectations, but also in how management explains the scale of AI investment, the return cycle, and future operating targets.

Cross-Market Observation: Capital Allocation and Trading Tools Are Equally Important

Intensifying market divergence also makes cross-market observation more important. When U.S. stocks, Hong Kong stocks, and digital assets are affected by different factors, in addition to tracking their respective price changes, how to manage the paths for using funds across different markets has also become an issue of concern for some users.

As a global one-stop asset allocation platform, BiyaPay uses USDT as its core funding entry point and connects scenarios such as U.S. and Hong Kong stocks, cryptocurrencies, commodity futures, and cross-border remittances through a single account system. The platform also supports exchanges among more than 30 fiat currencies and more than 200 digital currencies, and offers zero-commission participation in real U.S. and Hong Kong stock trading.

For users who follow multiple markets at the same time, centrally understanding market conditions and related services for different assets can reduce the hassle of switching between different tools. However, tools solve the problems of fund use and trading paths; they cannot replace market analysis. U.S. stocks, Hong Kong stocks, and digital assets each have different pricing logic and risk characteristics, and still need to be judged separately in light of the macroeconomic environment, corporate fundamentals, and one's own risk tolerance.

2. Hong Kong Stock Observation: The Tech Sector Still Needs Earnings Verification

Hong Kong stocks were generally weak last week. On October 23, the Hang Seng Index closed at 23,093.37 points, up 0.69% on the day but down about 4.52% for the week; the Hang Seng Tech Index closed at 3,871.66 points, up 2.05% on the day but down about 5.76% for the week.

Friday's rebound is not yet sufficient to confirm a trend reversal. Subsequent movement still needs to be judged alongside corporate earnings, industry demand, valuation levels, and market liquidity.

Changes in capital expenditure among large U.S. tech companies will also affect the market's expectations for the Hong Kong tech sector. However, internet platforms, consumer electronics, and semiconductor companies have different revenue structures and profit models, and the same AI growth logic cannot simply be applied to all of them.

For tech stocks, the key remains distinguishing short-term fluctuations caused by market sentiment from actual changes in corporate operating conditions.

3. Macro Observation: Oil Prices and U.S. Treasury Yields Remain Important Valuation Variables

As of October 23, WTI crude oil futures settled at about $103.44 per barrel, Brent crude oil futures settled at about $111.66 per barrel, and the U.S. 10-year Treasury yield was around 5.00%.

Rising energy prices may improve revenue for some upstream energy companies, but may also push up costs for transportation, manufacturing, and some consumer companies. For tech companies, energy costs and funding costs similarly affect infrastructure construction, business expansion, and valuation levels.

On the macroeconomic data front, the preliminary U.S. composite PMI for October was 57.6, lower than 58.4 in September but still in expansion territory. The final University of Michigan consumer sentiment index was 48.0, basically flat from 48.1 in September; the one-year inflation expectation rose from 4.6% to 4.7%.

These indicators present signals in different directions: Business activity remains resilient, but consumer confidence is weak, and short-term inflation expectations have risen somewhat. A single indicator cannot determine market direction; investors still need to assess economic growth, inflation trends, and the cost of capital at the same time.

If inflation pressure persists, expectations that interest rates will remain high may further affect highly valued assets; if inflation cools and corporate earnings remain resilient, this may provide a more favorable environment for risk assets.

4. This Week's Focus: Microsoft and Google Earnings and the Fed Meeting

Microsoft and Alphabet: Can Cloud Business Growth Cover AI Investment?

Microsoft and Alphabet are both scheduled to report results after the U.S. market close on October 28 Eastern Time, corresponding to the early morning of October 29 Beijing Time.

Microsoft's earnings report is worth focusing on Azure cloud business growth, AI service demand, and cloud business profit margins. If revenue grows while profit margins remain stable, new investment will be more easily recognized by the market; if costs rise faster than revenue, the market's doubts about the AI investment return cycle may persist.

Alphabet needs to answer two questions: whether its search and advertising businesses can maintain cash generation capacity, and whether Google Cloud can convert AI demand into revenue and operating profit.

Progress in AI products such as Gemini is worth watching, but product usage, paid scale, and profit contribution are not the same thing. Ultimately, the market still needs to see how commercialization capabilities are reflected in financial statements.

For these two companies, in addition to whether revenue and profit exceed expectations, management's explanations of capital expenditure, cloud business demand, and future growth may also affect post-earnings stock price reactions.

Amazon: AWS Growth and Capital Expenditure Need to Be Viewed Together

Amazon is scheduled to report results after the U.S. market close on October 29 Eastern Time, corresponding to the early morning of October 30 Beijing Time.

AWS growth will provide important clues for the market to judge cloud computing demand, but looking only at revenue growth is not enough. Whether new infrastructure can be put into use as planned, whether customer demand can continue, and whether operating cash flow can support expansion are also related to growth quality.

At the same time, Amazon's retail and logistics businesses will also affect the group's overall profitability. Changes in delivery efficiency, fulfillment costs, and retail profit margins need to be observed separately from the cloud business before comprehensively judging the group's cash generation capacity.

For the AI industry chain, cloud providers' capital expenditure not only affects their own financial performance but also relates to demand expectations for upstream chip, server, and related infrastructure companies.

Fed Meeting: After the Rate Decision, Policy Signals Also Matter

The Federal Reserve holds its monetary policy meeting on October 27–28, with the rate decision expected to be announced at 2 p.m. Eastern Time on October 28, followed by a press conference.

The market is focused not only on whether rates are adjusted, but also on how the post-meeting statement and press conference affect judgments about the future policy path. Even if the rate decision meets expectations, changes in policy wording may also affect U.S. Treasury yields, the dollar, and the performance of highly valued assets.

This week will also bring the preliminary U.S. third-quarter GDP and the September personal income and outlays report, which includes PCE price data, to be released at 8:30 a.m. Eastern Time on October 29, corresponding to 20:30 Beijing Time on October 29.

GDP data help judge the actual state of economic growth, while PCE is an important inflation indicator watched by the Federal Reserve. Investors need to observe both headline and core inflation, as well as year-over-year and month-over-month changes, and judge price pressure and demand conditions alongside consumption and investment performance.

If economic growth remains resilient while inflation is difficult to ease, higher funding costs may continue to limit valuations; if inflation cools and demand remains stable, corporate earnings may enjoy a more favorable environment. If economic demand weakens significantly, even if rate expectations decline, there is still a need to guard against the risk of downward revisions to earnings forecasts.

Other Earnings: Memory, Energy, and Financial Companies Provide Supplementary Clues

This week, memory, energy, and financial companies will also successively release earnings.

For the memory sector, attention can be paid to product mix, price changes, enterprise demand, and profit margins; for energy companies, actual realized prices, output, and cash flow need to be observed, and October oil price changes cannot be directly regarded as already reflected in third-quarter performance; for financial companies, attention can be paid to net interest income, deposit costs, credit impairment, and capital returns.

These industries can supplement the market's judgment on demand, costs, and the funding environment from different perspectives, but their business models differ, and corresponding indicators should still be used for analysis. Specific earnings release times are subject to the companies' latest announcements.

5. Summary: Beyond the Scale of AI Investment, Returns Matter More

The divergence in U.S. stocks last week shows that the market is not simply bullish or bearish on tech stocks, but is reassessing the growth quality, funding needs, and profitability of different companies.

This week, earnings reports from Microsoft, Alphabet, and Amazon will test whether AI investment can be converted into revenue, profit, and cash flow; the Fed's rate decision, preliminary U.S. third-quarter GDP, and September PCE data will affect the market's judgment on future funding costs and economic growth.

Next, what is truly worth watching is not which company invests the most, but which company can continuously convert investment into verifiable commercial results. As AI competition enters a stage that places greater emphasis on delivery capability, revenue quality, profit margins, and cash flow will become important bases for judging a company's long-term value.