With the third quarter earnings season in full swing, investors await results from Alphabet (GOOG, GOOGL), Microsoft (MSFT), Amazon (AMZN), Meta (META), Apple (AAPL), and other Big Tech names in the coming weeks.

TheTranscript founder Scott Krisiloff joins Seana Smith and Madison Mills on Morning Brief to discuss three key themes from the earnings season so far: spending on artificial intelligence (AI), expectations about the Federal Reserve's rate-cutting cycle, and consumer resiliency.

Krisiloff says “the vast majority of companies” are interested in applying AI to their businesses. “Where we're seeing spending happen is really in customer service and then also in software engineering from the average company.” Several companies are spending to adopt tools like AI agents and use existing platforms from providers like ServiceNow (NOW). He notes that the majority of overall AI spending comes from hyperscalers like Microsoft, Alphabet’s Google, and Amazon, which invest in AI infrastructure.

Amid the Fed’s rate easing cycles, there’s debate about the Fed’s next move after its super-sized 50 basis point cut in September. Some leaders like Comerica’s (CMA) chief banking officer, Peter Sefzik, have indicated that they want to see another 50 to 100 basis points cut. Krisiloff says the earnings calls from financial executives show “the gap between the confidence in financial markets versus the real economy.”

Krisiloff adds, “I think everybody is kind of waiting for more rate cuts here. I think even the Fed has just acknowledged that the rate cuts that they've had so far are just to bring us to a somewhat less restrictive stance. They still want to get to a neutral stance. But I think many actors in the economy are looking for a stimulative stance, and so the Fed's hand may really be pushed toward that stimulative stance over time.”

Consumer resilience is also a common theme of third quarter corporate earnings calls. “Resilient has been the most used word on earnings calls for the last two years now, as we've all been surprised that a recession really hasn't come through despite the higher interest rate environment. The consumer has just continued to spend.”

He continues, “What you're really seeing is a continuation of a bifurcation of the consumer where high- and moderate-income consumers are still spending a lot, and low-income consumers are really under pressure … I think what we're seeing right now in terms of consumer resilience is that employment is still carrying the day. As long as people are getting a steady paycheck and feel secure in their jobs, people are spending, and so that is powering the economy. The consumer is really the underpinning force of all of this."