Weekly Outlook: New Tech Earnings Meet AI Concerns
Microsoft, Alphabet, and Amazon are set to report their quarterly earnings this week. The focus will be primarily on the returns from their multi-billion-dollar AI investments. In addition, interest rate decisions by the Fed and the ECB are on the horizon.
October 26, 2026. FRANKFURT (Deutsche Börse). Losses prevailed on the stock markets last week. The DAX (DE0008469008) fell 1.7 percent, and the Stoxx Europe 600 (EU0009658202) dropped 1.4 percent. The MDAX (DE0008467416) fell even more sharply, dropping 2.5 percent. Since the beginning of the year, the mid-cap index has shown relative weakness and has been trading in negative territory.
High energy prices and concerns about France, in particular, weighed on sentiment in the stock markets in recent days. At the start of the new week, the decline in stock prices has not continued for the time being. Moody’s has maintained France’s credit rating at Aa3 with a negative outlook, despite the strained budget situation and political uncertainty. The decision could help stabilize yields on French bonds, which have risen significantly recently. In early trading, the DAX is trading at 25,200 points, slightly above Friday’s closing level.
High Expenses, Unresolved Profit Questions
According to Frank Klumpp of LBBW, however, doubts about the artificial intelligence business also contributed to the stock price declines. In his view, the latest quarterly reports have not dispelled skepticism regarding the massive investments in data centers. Meta Platforms raised the lower limit of its investment plan (including lease payments) for 2026 from $130 billion to $135 billion, while the upper limit remained at $145 billion. According to LBBW’s calculations, the investments expected from major U.S. technology companies for 2026 are now 62 percent higher than estimates at the beginning of the year.
Investors are currently particularly skeptical of specialized providers of computing power. Klumpp cites the data center operator CoreWeave, whose credit default swaps have recently risen sharply. Whether investments continue will depend on data center utilization rates and the solvency of their customers.
This week, more than a third of all S&P 500 companies will report quarterly earnings, including Microsoft and Alphabet on Wednesday and Amazon on Thursday. Particular attention will be focused on their respective cloud businesses, investment plans, and revenue outlooks. “The outlook for 2027 is likely to be even more important than the results themselves,” explains Martin Hartmann of Commerzbank. In Europe, companies reporting include Airbus, Mercedes-Benz, Volkswagen, and several financial institutions.
Optimistic Positioning, Tight DAX Range
In addition to corporate earnings, investor sentiment and positioning are also likely to influence future price movements. In the LBBW weekly outlook, Frank Klumpp points to the decidedly optimistic positioning in the U.S. futures markets. If these positions were unwound, there would be a risk of further price losses. At the same time, the Philadelphia Semiconductor Index has fallen below its 200-day moving average. Robert Halver of Baader Bank sees the sentiment among U.S. retail investors as less one-sided: In the latest survey by the American Association of Individual Investors (AAII), pessimists even outnumbered optimists, albeit without an extreme imbalance.
According to Jörg Scherer of HSBC, a specific price range plays a decisive role for the DAX. According to his analysis, the DAX is trading between the 50-day moving average at around 25,646 points and the 200-day moving average at 24,880 points. The shorter moving average, combined with the recent high of 25,694 points, forms a resistance zone, while the 200-day moving average provides longer-term support. Scherer also finds it striking that, according to AAII data, only about 17 percent of the U.S. retail investors surveyed hold a neutral stance. In the past, such a low level of indecision has often favored new trends. The data provides no indication of the possible direction.
Jörg Scherer
Central Banks Caught Between Inflation and Borrowing Costs
Most research firms expect key interest rates to remain unchanged at the Fed’s meeting on Wednesday and the ECB’s meeting on Thursday. Edgar Walk, chief economist at Metzler Asset Management, takes a different view. He expects the Fed to raise rates by 25 basis points because the U.S. economy is growing strongly and inflation remains high. In particular, investment in AI infrastructure has now spilled over into traditional capital goods.
Mark Wall of Deutsche Bank, on the other hand, expects the ECB to hold interest rates steady. While higher energy prices have heightened inflation risks, the rise in capital market interest rates has already tightened financing conditions. Added to this is the tense situation in the French government bond market. Deutsche Bank does not expect the ECB’s next rate hike until December.
Key Economic and Business Dates for the Week
Monday, October 26
10:30 a.m. Germany: ifo Business Climate Index. After 89.9 points in September, Deka expects a slight increase to 90.0 points. While the current situation is likely to improve somewhat, the institute expects business expectations to decline after five consecutive increases.
Tuesday, October 27
1:30 p.m. U.S.: Durable goods orders. Orders in September are expected to have risen by 1.4 percent compared with the previous month, after falling by 0.1 percent in August.
3:00 p.m. U.S.: Consumer Confidence. Following a reading of 81.9 points in September, the consensus estimate for October is 80.3 points.
Wednesday, October 28
7:00 p.m. U.S.: Federal Reserve interest rate decision. The Fed is expected to leave its target range unchanged at 3.75 to 4.00 percent. Following the surprisingly high inflation in September, most economists do not expect the next interest rate hike until December.
Thursday, October 29
11:00 a.m. Eurozone: Economic confidence. Deka forecasts a decline in the sentiment index from 97.9 to 97.6 points in October. The ongoing conflicts in the Middle East are expected to hinder a recovery.
1:30 p.m. U.S.: Gross Domestic Product. The consensus forecast for the third quarter is annualized growth of 3.0 percent, following 2.2 percent in the previous quarter. Deka forecasts as much as 3.5 percent, supported by private consumption as well as investment in equipment and inventory. LBBW, on the other hand, expects only 2.5 percent.
1:30 p.m. U.S.: Personal Consumption Expenditures Price Index (excluding energy and food). This inflation measure, which the Fed closely monitors, is expected to have risen 3.1 percent year-over-year in September, following a 3.0 percent increase in August.
2:15 p.m. Eurozone: ECB interest rate decision. The European Central Bank is expected to leave the deposit rate at 2.50 percent and the main refinancing rate at 2.65 percent. Deutsche Bank does not expect another rate hike of 0.25 percentage points until December. In its assessment, rising capital market interest rates and the French debt crisis are limiting the scope for further rate hikes.
Friday, October 30
10:00 a.m. Germany: Gross Domestic Product. Following 0.3 percent growth in the second quarter, economists now expect growth of just 0.1 percent for the third quarter. Deka even forecasts a decline of 0.1 percent, citing the winding down of one-time effects from the first half of the year and the negative impact of low water levels.
11:00 a.m. Eurozone: Gross Domestic Product. The consensus forecast calls for 0.2 percent growth in the third quarter compared with the previous quarter, down from 0.6 percent previously. Helaba, however, forecasts a decline of 0.1 percent. High energy prices are increasingly weighing on private consumption.
2:00 p.m. Germany: Consumer prices. The consensus expects the annual inflation rate to decline from 3.3 to 3.0 percent in October. Commerzbank anticipates 2.9 percent due to the fuel rebate, while LBBW expects the inflation rate to remain unchanged at 3.3 percent.
By Thomas Koch, October 23, 2026, © Deutsche Börse AG
About the Author
Thomas Koch is a CEFA investment analyst, an investment specialist in structured products, and a certified certificate advisor. Since early 2006, he has been covering developments in the capital markets as a freelance journalist.
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