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Big Tech Earnings, Anthropic’s IPO and the Fed Set Up a Pivotal Week

October 26, 2026

Video Transcript

JD Durkin: Let’s bring in a very good friend of ours now, Melissa Otto, head of Visible Alpha research at S&P Global Intelligence. Good to see you here today.

Melissa Otto: Great to be here. Thanks for having me on.

JD Durkin: So let’s jump right into the good stuff. We’ve got Mag Seven earnings this week. We get Microsoft. We get Alphabet on Wednesday. We get Amazon reporting Thursday. These are specifically the big cloud giants out of the megacaps. What are you looking for in a few of these big names? And we know they can oftentimes move the S&P 500 along with them.

Melissa Otto: Absolutely. And I think that uptick that we’re seeing today was, in a sense, lifted by the S-1 that Anthropic came out with. I mean, the growth on the top line was just staggering in that S-1. So I think that’s maybe giving us a little bit of a positive lift as we go into Wednesday’s earnings for Microsoft and Alphabet. Microsoft expectations have been fairly stable since last quarter. Looking at Alphabet, we’ve seen an uptick in expectations around Google Cloud, which suggests that that business is going to be an important one for the company. However, what’s interesting is that the margin has come down a bit in terms of expectations. So, okay, they’re seeing a little bit of lift potentially on the revenue side, but on the margin side, there may be an offset. So we’ll be watching that very carefully.

JD Durkin: Yeah. Let’s revisit the Anthropic side of this just a little bit. Have you had time to go through the S-1 today? Admittedly, I saw it very briefly. I did not have the time on my hands today. Ticker symbol ANT, maybe around November 17th, potential listing. Does the timing of this surprise you, now that we are perhaps in a higher-for-longer interest rate environment? As we saw how things went with SpaceX before interest rates started going up, the team at Anthropic is saying here in Q4, this is likely the time to go public.

Melissa Otto: They need the money. I mean, more compute seems to suggest more revenue.

JD Durkin: Yeah.

Melissa Otto: And they showed this chart in the S-1 that, from last year in Q1, there was this significant ramp-up in revenue to compute. And that revenue to compute is essentially what their business is demonstrating, and how it’s scaling. That’s the consumption model that is essentially driving revenue growth. And I mean, the magnitude of that revenue growth is just staggering. So it’ll be interesting to see how much more it can go, and for how long.

JD Durkin: Yeah. As if all of that weren’t enough, it’s also Fed week here on Wall Street, yet another decision on short-term interest rates Wednesday. No dot plot coming along with it. Fed communication has indicated maybe we take a breather for October, after raising interest rates in September. What does that mean? What are you looking for Wednesday, first of all, and how does that set the stage for the final FOMC meeting of the year in December?

Melissa Otto: Absolutely. I mean, looking to see what the read could be into the end of the year, I think this will be very important. One of the things we’ve seen the market doing is going back and forth, going back and forth. Oh, we’re going to start to get a Santa Claus rally. Then it pulls back. We’re not going to get a Santa Claus rally. So the question is going to be, are we going to get that rally? And is that going to be the catalyst that gets the market excited?

JD Durkin: Yeah. Of course, I’ve got less than a minute left. PCE inflation data comes out Thursday. How are you thinking about inflation, maybe more stubborn and more sticky than expected, as a pressure point on all of this?

Melissa Otto: Based on S&P Market Intelligence data, it looks like it’s going to be fairly mixed. We’ve seen reports showing that there’s a range of different assumptions in there. So we’ll be looking to see whether or not that was a surprise.

JD Durkin: A longtime friend of ours here on the show, Melissa Otto, head of Visible Alpha research at S&P Global Intelligence. Good to see you to kick off our first show of the week today. Come back and see us anytime.

Melissa Otto: Absolutely.

JD Durkin: Take care. We’ll see you soon.

Wall Street is heading into one of the busiest weeks of the year, with earnings from Microsoft, Alphabet, and Amazon, a Federal Reserve decision, and fresh inflation data, all following the release of Anthropic’s S-1 filing. JD Durkin speaks with Melissa Otto, head of Visible Alpha research at S&P Global Intelligence, about what to watch from the cloud giants, Anthropic’s planned IPO, and the outlook for the Fed.

Otto says the market’s uptick may have been lifted in part by Anthropic’s S-1, calling the company’s top-line growth staggering. Heading into earnings, she says expectations for Microsoft have been fairly stable since last quarter, while expectations for Google Cloud at Alphabet have risen even as margin expectations have come down, suggesting a possible offset she will be watching closely. On Anthropic, which may list in November under the ticker ANT, she says the company needs the money, noting that the S-1 shows a significant ramp in revenue relative to compute since the first quarter of last year, reflecting a consumption model driving revenue growth.

Looking at the Fed decision on Wednesday, Otto says the meeting will be important for gauging how the market could finish the year, as investors go back and forth on whether a Santa Claus rally will materialize and serve as a catalyst. On Thursday’s PCE inflation data, she says S&P Market Intelligence data points to a fairly mixed picture, with a range of assumptions, and she will be watching for any surprise.

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