Wednesday's big stock stories: What’s likely to move the market in the next trading session

The Fed’s rate decision is due Wednesday at 2 p.m. ET; ahead of it, the 10-year Treasury yield stood at 4.99% and the 2-year at 4.74%. Robinhood shares fell 7% after hours after third-quarter earnings missed expectations, while revenue met expectations and net income declined. The article also previews Biogen, Boston Scientific, GSK, Alphabet and Microsoft earnings, and notes data-center ETFs remain 15%–22% below recent highs despite gains over the past two days.

Analysis

The key cross-asset signal is that a Fed cut would not automatically repair the economics of capital-intensive AI infrastructure. Data-center project returns are exposed to long-term borrowing costs and power availability, while the 10-year yield can stay elevated even if policy eases. That makes the recent bounce in DTCR, IDGT and SRVR a weak confirmation by itself; the more durable test is whether Alphabet (GOOG) and Microsoft (MSFT) demonstrate monetization commensurate with continued infrastructure spending. NVIDIA (NVDA) may benefit from sustained buildout, but capex scrutiny can also shift investor preference toward suppliers with nearer-term realized demand rather than leveraged infrastructure owners.

Near term, the Fed decision and GOOG/MSFT reports create event risk; avoid extrapolating one-session moves. Over 1–3 months, watch long yields, hyperscaler capex commentary and evidence of returns on AI investment. Over 6–18 months, persistent high financing costs or power constraints could delay projects and pressure digital-infrastructure valuations even if AI demand remains intact. Conversely, credible customer returns and easing long rates would weaken that bear case.

HOOD’s post-earnings decline raises a separate quality-of-earnings question: a revenue result meeting expectations did not prevent lower net income. Its rebound thesis needs management detail on the drivers and durability of earnings, not merely the prior drawdown. The contrarian risk is that investors treat AI demand as sufficient proof of infrastructure equity returns; the bottleneck may instead be financing and monetization. High-yield ETF distributions are not a substitute for credit analysis, particularly if restrictive rates persist.

Key Decisions for Investors

• Avoid a broad pre-Fed directional bet in data-center equities. After the decision, consider a small relative-value position long MSFT versus short SRVR only if company commentary supports AI monetization while long yields remain elevated; close or reassess if yields fall materially or infrastructure returns are explicitly validated.
• Treat HOOD as a watch, not a dip-buy: wait for the earnings call to clarify why net income fell and whether the weakness is recurring. A further deterioration in earnings guidance would falsify a stabilization thesis; improving earnings drivers alongside less negative price action would support reconsideration.
• Use the GOOG and MSFT reports as the near-term AI catalyst: track capex plans against cloud demand and evidence of customer returns. If spending rises without credible monetization, reduce exposure to broad AI infrastructure beta; if returns are demonstrated, the bearish financing thesis is weakened.
• Do not infer safety from SHYG, HYG or JNK yields. Before adding credit risk, verify credit spreads and issuer-quality exposure; widening spreads despite stable Treasury yields would argue against reaching for distribution.