Brief No. 1, revisited: inflation was the headline, Alphabet was the story | Revisited, Sunday, November 1, 2026

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As published October 29, 2026 · 5:36 AM CT · unedited

The Retest Brief No. 1: Big tech split overnight. Inflation data at 7:30. Alphabet sank, Microsoft rose, and PCE is next. Here's what I'm watching.

The one thing that matters today. At 7:30 AM CT, Q3 GDP and September PCE inflation come out together. PCE is the Fed's preferred inflation gauge, and it lands the morning after the Fed held rates with two officials voting for a hike. Today's number shapes how the market prices December.

What's priced in. Q3 GDP: +3.2% annualized expected (prior +2.2%). Source: Yahoo Finance. September PCE: +3.6% y/y expected; core +3.1%. Source: Yahoo Finance. December hike: ~78% priced. Source: Reuters. Release time: 8:30 AM ET / 7:30 AM CT. Source: BEA schedule.

Overnight. Alphabet fell about 10% after hours. Revenue was in line, but negative free cash flow of about $9 billion as capital spending surged spooked investors (Reuters). Microsoft rose about 3% after hours on roughly $19 billion in free cash flow (Reuters). Nasdaq futures were down more than 1% early, while Dow futures were higher (Reuters, Yahoo Finance). The Fed: yesterday's vote was a hawkish split, but markets read Warsh's press conference as dovish overall, and 2-year yields fell (Reuters).

What it could mean for NQ, ES and gold. Hotter PCE strengthens the December hike case; higher yields tend to weigh on rate-sensitive tech and gold. In line or cooler PCE eases the pressure. These are general tendencies, not predictions. NQ is already carrying an Alphabet-sized weight.

On deck. Today: the ECB meets (Reuters). After the close: Amazon and Intel earnings.

Sources: Reuters Morning Bid via Investing.com, Yahoo Finance, BEA release schedule. Commentary and education only. Not financial advice.

(Left out of this copy: one section on personal trading, and Substack's subscribe prompt. Nothing else has been changed.)

Looking backwritten November 1, 2026, with hindsight

What actually happened

Third-quarter GDP grew at a 3.4% annualized rate, above the 3.2% economists polled by LSEG expected.
September PCE inflation rose 3.6% from a year earlier and core PCE 3.1%, both in line with expectations.
Alphabet shares fell 12.6% on the day, deeper than the roughly 10% after-hours drop the Brief reported that morning.
At the close: Nasdaq Composite −1.37% to 26,184.72, S&P 500 −0.30% to 7,720.39, Dow −0.25% to 52,342.56.

Why it moved

The report the Brief called "the one thing that matters" landed exactly on expectations, so it gave the market little new to trade. After the Fed's October 28 hold, CME FedWatch already put the chance of a December hike near 75%, and in-line inflation did not change that picture much.

The day was driven instead by Alphabet and the question of what AI spending is costing Big Tech. a risk-off day in which small caps outperform suggests the AI worry is not spreading across the whole market^{Ross Mayfield, Baird}.

What we learned

What the Brief saw: that Alphabet was a weight on NQ in particular while the Dow held up. That split showed in the close: the Nasdaq fell more than four times as much as the S&P 500.
What it weighed wrong: it framed the inflation report as the day's main event. When a scheduled number is widely expected to come in on forecast, the overnight earnings story can matter more.
What came next: the AI-spending worry did not fade. After Amazon and Intel reported that evening, the Nasdaq Composite fell 2.86% on October 30.

The short version (the what and the result)

GDP beat (3.4% vs. 3.2% expected); PCE inflation came in exactly as expected.
Alphabet fell 12.6%; Nasdaq −1.37%, S&P 500 −0.30%.
The day's driver was AI spending, not inflation.