Quick Take Big Tech’s 2026 capital spending plans have blown past expectations , sparking a sharp market reaction. Investors still believe in AI — but they now want clear proof of returns , not just long-term promises. The CapEx Shock Across recent earnings, mega-cap tech companies pushed 2026 CapEx from “already massive” to “historically extreme” : Meta Platforms : US$115–135B vs US$110B consensus Stock jumped ~10% initially, but gains faded → investors want evidence, not AI rhetoric Microsoft : US$140–150B vs US$109B consensus Stock fell ~10% → ROI timing now under scrutiny Alphabet : US$175–185B vs US$115B consensus Shares slipped as markets adjusted to a more capital-intensive Google Amazon : ~US$200B vs US$146B consensus Stock dropped ~11% after-hours on cash flow concerns What Investors Are Really Worried About This is no longer about believing in AI — it’s about financial optics and timing . Key Market Fears CapEx is rising fa...
Quick Summary
RBI kept its key rate unchanged at 5.25%, matching market expectations
US slashed tariffs on Indian goods to 18% from 50%, lifting growth outlook
Rupee rebounded strongly, becoming Asia’s top performer this month
Inflation remains well below target, giving RBI policy flexibility
What Happened
The Reserve Bank of India held its repo rate at 5.25%, with the six-member Monetary Policy Committee voting unanimously to keep policy unchanged and maintain a neutral stance.
The decision comes as India’s macro outlook improves, helped by higher government spending and a surprise US–India trade boost.
Why the Outlook Improved
US President Donald Trump announced tariff cuts on Indian goods to 18% from 50%
Economists now expect upward revisions to India’s growth forecasts
The Indian government increased budgetary spending, supporting domestic demand
Key impact: The rupee bounced back sharply, reversing January’s losses.
Inflation Gives RBI Room
RBI has cut rates by 125 basis points since February last year
Inflation has stayed below 2% for four straight months, far under the 4% target
Latest rate cut was a 25bp reduction in December
Bottom line: With inflation muted, the RBI can afford to stay patient.
Growth Outlook
FY2026 growth forecast: >7%, starting April 1
Current FY growth: ~7.4% (estimate)
Stronger exports, fiscal support, and easing trade pressures are expected to keep momentum intact.
Bottom Line
India is in a sweet spot: low inflation, improving trade ties, and solid growth prospects.
The RBI is holding steady for now, but the combination of US tariff relief and fiscal support has clearly tilted risks toward stronger growth rather than the need for immediate easing.
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