Published by Global Banking & Finance Review®
Posted on January 29, 2026
3 min readLast updated: January 29, 2026
Add as preferred source on GoogleMicrosoft and Meta's AI investments show high costs. Market reactions vary, with Meta gaining value. Federal Reserve maintains steady economic outlook.
Jan 29 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole.
Who knew building AI would cost so much. Results from Microsoft and Meta showed truly nose-bleeding amounts being spent on capex, with the former splashing out almost $38 billion in the quarter, up two-thirds on the previous year. Meta boosted its capital spending plans for this year by 73% to a range between $115 billion and $135 billion.
Yet investors reacted very differently to those plans, knocking $240 billion off Microsoft's market value while lifting Meta by $140 billion. The Microsoft drop was more than the entire capitalisation of Citigroup, but then banks are so last-century.
Seems Meta's upgrade to its earnings outlook really wowed investors, while the Redmond-based giant struggled to placate concerns that costs would ultimately outstrip profit growth.
Still, one company's costs are another's revenues as shown by a trebling in chip-maker Samsung Electronics' operating profits. Memory chips used to be a boring part of the market, until there weren't enough to go around.
Wednesday's Federal Reserve meeting has also been called boring, though Chair Jerome Powell sounded pretty chipper in his presser. The economy was on a "solid footing" he said several times, with a "clearly improving outlook".
There was "broad support" on the committee for holding rates steady, apart from the two that voted for a cut of course.
The Fed had already done a lot of "normalising" on rates, he added, and policy was now only "somewhat restrictive", or even "loosely neutral". Markets took that as confirmation an April cut was off the table, with June staying at 61% in part because investors assume President Trump will have found a more dovish replacement as chair by then.
Powell, though, would not be drawn on whether he would step down as a Fed governor in May, or stay on until 2028. One reporter wondered why he would want to leave at all given threats to Fed independence, but Powell merely smiled.
Over in currencies, the dollar still looked vulnerable despite Treasury Secretary Bessent insisting the U.S. still has a "strong dollar" policy, no matter what Trump might say.
More meaningful might be the murmurings from EU and ECB officials about the euro's rise on the dollar being harmful to exports and a downside risk for inflation.
Actual intervention from the staid ECB seems highly unlikely, but the Swiss central bank has more form and the flight from the dollar is pushing the franc up broadly, including against the euro.
Indeed, the franc has broken below huge chart support that must have the Swiss worried. Intervention by the SNB can be messy for markets as it usually sells francs for euros, and then spreads some of those euros out among dollars, sterling etc, causing cross-currents in a range of currencies.
Key developments that could influence markets on Thursday:
- Euro zone consumer confidence, business sentiment for January
- Riksbank policy meeting, ECB board member Piero Cipollone speaks
- U.S. November trade data, weekly jobless claims
(By Wayne Cole; Editing by Sonali Paul)
Capital expenditure refers to funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, or equipment. It is an important investment for long-term growth.
Market value is the price at which an asset would trade in a competitive auction setting. It reflects the current value of a company based on its share price and the total number of outstanding shares.
The Federal Reserve, often referred to as the Fed, is the central bank of the United States. It regulates the U.S. monetary and financial system and aims to provide the country with a safer, more flexible, and stable monetary and financial system.
Investor sentiment refers to the overall attitude of investors toward a particular security or financial market. It is often influenced by market trends, economic indicators, and news events.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation to keep the economy running smoothly.
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