SPX: AI spending shakes tech

The previous week has been a volatile one, with respect to all uncertainties surrounding markets and hence, increased nervousness. Fed officials decided to keep interest rates unchanged at the FOMC Meeting, which was strongly expected. The US President announced on Friday that he is proposing Kevin Walsh as the new Fed Chair in May this year. This information was well perceived by markets, considering previous worries regarding the future independence of the Fed from political interference. Still, markets continued to trade with a negative sentiment, where the S & P 500 reached 7K as the new ATH, but tumbled down to 6.893. The index is closing the month at 6.939.
The previous week brought the majority of earning reports for tech companies, as well as industrials, finance, energy and consumer sectors, like IBM, AT&T, Visa, Mastercard, Exxon Mobil and others. The overall theme for investors was evaluation of how AI capital spending translates into profit growth. Strong earnings came from Meta, Apple, Verizon, and energy stocks. However, the huge weekly surprise came from Microsoft. Although the company reported solid quarterly results, still investors' concerns over Microsoft's slowing cloud growth and heavy AI capital spending dropped the value of its shares by some 12%. This was one of the worst days for MSFT during the last several years.
The week ahead also brings quarterly results of some big names in tech and pharma industries like Alphabet (Google), Amazon, Elly Lilly, Pfizer. On a macro level, the week ahead brings US jobs data, where JOLTs and Unemployment rate in December will be posted. Some volatility might be triggered again.