**Global Market Brief: Tech Volatility & Macro Signals** **Overview** Investors are bracing for a decisive week as market sentiment shifts from optimism to caution. Following a turbulent reaction to Microsoft’s latest figures, the spotlight turns to upcoming reports from Alphabet and Amazon. These releases, combined with critical US labor data, will likely dictate near-term market direction. **Tech Sector: The AI Reality Check** The earnings season has taken a dramatic turn. **Microsoft** reported a strong fiscal Q2 with revenue hitting **$81.3 billion** (up **17%**) and EPS of **$5.16**, comfortably beating Wall Street estimates. However, markets reacted negatively to the company's ballooning capital expenditure on artificial intelligence. Concerns over the timeline for AI monetization triggered a sharp sell-off, with Microsoft shares plunging **11%**—their steepest single-day decline since 2020. This "sell-the-news" reaction has raised the stakes for **Amazon** and **Alphabet**, which are scheduled to report in the coming days (Amazon confirmed for **February 5**). Investors are no longer satisfied with growth alone; they are demanding clear evidence that massive AI infrastructure spending is yielding profitable returns. **Federal Reserve: Holding Steady** On the macro front, the Federal Reserve maintained its cautious stance at the January meeting, keeping the benchmark interest rate unchanged at **3.50%–3.75%**. While the decision was widely expected, the Fed’s commentary emphasized that the economic outlook remains uncertain. Policymakers cited solid growth but noted that inflation, while cooling, is not yet fully vanquished. This "hold" reinforces the "higher-for-longer" narrative, dampening hopes for aggressive rate cuts in the immediate future. **Labor Market Focus** Attention now shifts to the **February 6** US Non-Farm Payrolls report. The December data showed a cooling labor market with only **50,000** jobs added, missing the **60,000** forecast. A similar lukewarm reading in the upcoming report could reignite recession fears, while a surprisingly hot number might complicate the Fed’s inflation fight. The unemployment rate—currently stabilizing around **4.4%**—will be a key metric to watch for signs of broader economic stress. **Investor Sentiment** The mood has clearly soured on "growth at any cost." The divergence between strong corporate earnings and weak stock performance suggests valuations are under strict scrutiny. With the Fed pausing and AI ROI under the microscope, volatility is expected to remain elevated throughout the week.