5 things to know before the stock market opens on Wednesday, October 26

Here are the most important news items investors need to start their trading day:

Stocks are on track to advance on Wednesday. The major US indexes had another big day on Tuesday, extending equities’ winning streak to three days. But then some big tech companies reported quarterly results (more info below), and suddenly, a pretty steady earnings season started to look a little more sketchy. More Big Tech earnings are coming this week too: Facebook father Meta was on deck to report after Wednesday’s bell, and Apple and Amazon go Thursday. Read live market updates here.

Microsoft beat on the top and bottom lines when it quarterly results report Tuesday, but weak cloud revenue and inadequate guidance weighed on the tech giant’s stock in after-hours trading. Wall Street had expected revenue growth for its Azure public cloud business to slow this quarter, but it was lower than anticipated, and not just because consumer growth was adjusted. . CFO Amy Hood says energy costs affect Azure’s gross margin, another example of how inflation is affecting pretty much everything.

Alphabetanother tech giant to report earnings on Tuesday, fares are not much better with investors as it confirms broader concerns about the online advertising market. Parent company Google says YouTube’s ad revenue is down about 2% year-over-year, while Wall Street expects a 3% increase. While Alphabet’s overall ad revenue increased slightly during the quarter, the company saw lower spend on search ads for categories like mortgages, which are being hit by a drop in demand due to rising rates. (see below) and cryptocurrencies, which experienced a sharp downturn this year along with other markets.

Mortgage demand has dropped lowest level in 25 years This is in large part thanks to rising interest rates, according to the Mortgage Bankers Association. Interest rates on the most popular mortgage, fixed for 30 years, are hovering above 7% after starting the year around 3%. The quick turnaround, following years of low rates and easy money from the Federal Reserve, has cooled what became a super-hot market during the first two years of the Covid pandemic, when Americans buy homes in suburbs and suburbs. Although prices are still higher than they were a year ago, the rate of increase has cooled considerably as the exchange rate scares off sellers, buyers and builders.

Ukrainian officials say Russian forces are concentrating strength and numbers in the southern port city of Kherson. Ukraine’s military has for weeks now been mobilizing Russian troops to the south and east, recapturing territory that Russia claimed in the early days of the war. Now Kherson is shaping up to be a major flash point in this skirmish. An adviser to Ukrainian President Volodomyr Zelenskyy said, referring to Russia’s recent moves. “On the contrary, the heaviest battle will be for Kherson.” Read live updates on the war here.

– Sarah Min, Jordan Novet, Jennifer Elias, Diana Olick and Natasha Turak of CNBC contributed to this report.

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