Fed minutes, Pepsi earnings, midterm megadonors and more in Morning Squawk

Microsoft is suspended from the PERM green card program, accused by VP Vance of H-1B abuse. The Labor Department alleges fraud in labor certification. Microsoft shares traded around $529.70, unchanged post-announcement.

PepsiCo reported a 2% decline in North American soft drink sales volumes in Q3, prompting a cut to its Q4 sales growth forecast. CEO Ramon Laguarta attributed the slowdown to consumers spending more carefully due to inflation and rising interest rates. The company plans to raise prices on chips and soda later this year and in early 2027. Shares of PepsiCo were up 0.9% on Thursday.

The U.S. Department of Labor suspended Microsoft and Adobe from its Permanent Labor Certification program, citing active federal investigations. The move affects several other companies and is part of a broader crackdown on foreign worker programs. According to Labor Secretary Keith Sonderling, the affected companies have requested nearly 3 million foreign workers since 2009.

The U.S. government suspended Microsoft and Adobe from the PERM program, which allows companies to apply for green cards for H-1B visa workers, citing alleged fraud. Other major IT firms, including Cognizant, Infosys, Tata, Wipro, HCL, and Capgemini, were also suspended. The Labor Department is investigating nine universities over J-1 visas. Microsoft and Adobe shares rose slightly, while Cognizant and Infosys fell.

PepsiCo (PEP) reported Q3 core EPS of $2.34, beating estimates, with revenue up 5.6% YoY to $25.27B. The company lowered FY26 core EPS growth guidance to 2.5-3.5% and narrowed organic revenue growth guidance to ~3%. North America showed sequential improvement, while international growth accelerated to 8%. Core operating margin contracted by 35 bps to 16.9%.

Microsoft and Adobe are suspended from using foreign workers by the Trump administration, according to Vice President J.D. Vance. The move follows allegations of visa abuse, with Microsoft accused of hiring 6,300 H-1B workers and 3,000 green card holders while laying off 6,000 U.S. workers. The H-1B visa program is intended for specialty roles unfillable by U.S. workers.