As the week progresses, the stock market has experienced some turbulence as big tech earnings fail to meet investor expectations. The S&P 500 and Nasdaq both saw declines, with the Dow Jones Industrial Average losing over 200 points shortly after the opening bell.
In particular, Microsoft and Meta reported earnings that slightly beat estimates, but forward guidance caused their stock prices to drop. Microsoft shared expectations for slower growth in its cloud business, leading to a more than 4% decline in its stock, while Meta forecasted “significant” capital expenditures growth next year, causing its shares to fall over 2%.
Earlier in the week, Alphabet’s earnings beat generated positive reactions from investors as CEO Sundar Pichai highlighted the success of the company’s AI investments.
Investors are eagerly awaiting the earnings reports from Apple and Amazon, set to be released after the market closes. They will be looking for signs that artificial intelligence is driving iPhone demand for Apple, especially following the rollout of the iOS 18.1 update. Expectations are high for a strong beat from Amazon.
On the economic front, the personal-consumption expenditures index, the Fed’s preferred inflation gauge, cooled to 2.1% year over year in September. However, the core index, which excludes food and energy prices, came in higher than expected at 2.7%.
Jobless claims from last week fell more than expected to 216,000, a 12,000 drop from the previous week, surpassing economists’ expectations of 230,000.
In commodities, oil futures saw an increase with West Texas Intermediate crude rising nearly 1% to $69.27 a barrel, while Brent crude climbed 0.8% to $73.13 a barrel. Gold prices slipped almost 1% to $2,776.80 an ounce, and the 10-year Treasury yield rose two basis points to 4.292%. Bitcoin also edged up to $71,869.
The week has been eventful so far, with tech earnings playing a significant role in market movements. As investors eagerly await the upcoming earnings reports, the market remains dynamic and responsive to new information. Stay tuned to Extreme Investor Network for more updates and analysis on the latest market trends and developments.