Stocks Slide Amid Disappointing Earnings Reports from Microsoft and Meta

Stocks experienced a downward trend during one of the busiest days of earnings announcements, as investors assessed the results from Microsoft Corp. and Meta Platforms Inc. The mixed economic data added to the uncertainty surrounding the potential for a Federal Reserve interest rate cut.

The mixed economic data added to the uncertainty surrounding the potential for a Federal Reserve interest rate cut.

U.S. stock futures dropped, particularly the Nasdaq 100, which fell by over 1% due to a 4% decline in pre-market trading for both Microsoft and Meta. These two companies were estimated to contribute to half of the losses in Nasdaq futures. Meanwhile, Amazon Inc. and Apple Inc. are set to release their earnings later today.

The dollar maintained stability, poised for its largest monthly increase in over two years, as investors adjusted their expectations for a Fed rate cut following positive economic growth and employment data released on Wednesday.

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Michael Brown, senior strategist at Pepperstone Group Ltd., commented on the cautious sentiment among investors in response to the disappointing results from Microsoft and Meta. He noted that the recent U.S. GDP report underscored the resilience of the U.S. economy, which continues to bolster the dollar.

In Europe, the Stoxx Europe 600 Index recorded its third consecutive decline, on track for its steepest monthly drop in a year. The losses were led by BNP Paribas SA, which saw a more than 7% decrease following its third-quarter earnings report.

Asian markets also faced declines, with stocks in Japan, Australia, and South Korea contributing to a regional index that is on course for its worst month since August 2023. While mainland Chinese shares showed mixed results, Hong Kong stocks rose, buoyed by data indicating a return to growth in Chinese manufacturing for the first time since April.

Additionally, the Bank of Japan decided to keep its key interest rate steady amid increasing economic uncertainty, with the yen strengthening slightly to below 153 per dollar. Oil prices continued to rise, building on gains from the previous session, while gold prices retreated after hitting a new high, reflecting cautious investor sentiment ahead of the upcoming U.S. elections.

Source

Kostadin Dimitrov