US stock indexes declined on Thursday, marking a second consecutive day of losses as tech earnings showed mixed results. Major tech companies, including Microsoft and Meta, reported earnings that exceeded estimates; however, forward guidance concerns contributed to share declines for both companies. Microsoft fell over 4% on worries about slowing cloud growth, while Meta lost more than 2% due to projected increases in capital spending.
Key Market Moves and Economic Indicators
Market Performance:
S&P 500: Down 0.84% at 5,764.93
Dow Jones: Dropped 0.47% (-198.87 points) to 41,943.67
Nasdaq Composite: Fell 1.25% to 18,372.58
Tech Earnings:
Microsoft: Despite a slight earnings beat, the company’s stock dropped due to expectations of slower cloud segment growth.
Meta: Shares slid after the company projected "significant" capital expenditures for the upcoming year.
Alphabet: Earlier in the week, Alphabet's strong earnings and CEO Sundar Pichai’s positive remarks on AI investments buoyed investor sentiment, though this enthusiasm didn’t carry over to other tech giants.
Apple and Amazon: Investors are closely watching their reports due after the market closes, with expectations for signs of AI-driven iPhone demand and a strong performance from Amazon.
Economic Data:
PCE Inflation: The Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation measure, eased slightly to 2.1% in September, down from 2.2% in August. However, the core PCE—which excludes volatile food and energy prices—rose to 2.7%, surpassing expectations.
Jobless Claims: Initial jobless claims dropped to 216,000 last week, a decrease of 12,000 and lower than the anticipated 230,000, indicating a continued robust labor market.
Sector and Economic Highlights
Energy and Commodities:
Oil prices gained modestly, with WTI crude up 0.96% at $69.27 per barrel and Brent crude rising 0.8% to $73.13.
Gold dipped nearly 1% to $2,776.80 an ounce, while the 10-year Treasury yield rose slightly by two basis points to 4.292%.
Crypto: Bitcoin inched up to $71,869, reflecting slight gains amid broader market volatility.
Investor Sentiment and Market Outlook
With the tech sector's mixed earnings and growing uncertainty surrounding the Fed’s next moves, investors are treading carefully. The upcoming earnings reports from Amazon and Apple will be closely watched to gauge overall market sentiment. With inflation moderating but not yet fully under control, and jobless claims remaining low, the Fed is likely to stay cautious on interest rate adjustments in the short term.
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