Tech stocks faced pressure as Meta earnings disappoint, pushing the stock market towards its lowest levels since May.
Despite a drop in bond yields, the tech sector, a driving force behind this year’s equity rally, experienced a selloff.
The Nasdaq 100 declined approximately 1%, bringing the S&P 500 closer to a “correction.”
Facebook parent company, Meta Platforms Inc., slumped after failing to meet investors’ expectations for a long-term advertising rebound, and United Parcel Service Inc. faced a 5% decline due to a profit-target cut.
Other tech giants like Alphabet Inc. and Tesla Inc. also reported disappointing earnings, causing a collective market value loss of around $200 billion among the “Magnificent Seven” tech companies.
Although there’s still hope that Amazon and Apple might report better results, the situation suggests challenges for the entire big-cap tech sector.
Treasuries rebounded due to signs of a Federal Reserve pause, while the US economy displayed strong growth, accompanied by a decline in underlying inflation.
These developments may impact the tech industry, which is facing challenges despite robust economic data. Investors remain cautious about the risk of a recession, and they are closely monitoring economic trends.
As long as unemployment stays low and consumer spending continues, the market may recover from its recent lows.
In corporate news, Mastercard, Comcast, Bunge, Ford Motor, Harley-Davidson, IBM, First Citizens BancShares, Hertz Global Holdings, and Bristol-Myers Squibb reported various financial results and forecasts.
Stocks experienced mixed movements, with the S&P 500 down 0.3%, the Nasdaq 100 down 0.7%, the Dow Jones Industrial Average unchanged, and the Stoxx Europe 600 down 0.3%.
The MSCI World index fell 0.5%. In currency markets, the Bloomberg Dollar Spot Index remained stable, the euro fell 0.2% against the dollar, and the British pound rose slightly.
Cryptocurrencies witnessed Bitcoin falling 1.5% to $34,171.7, and Ether dropping 0.2% to $1,784.28.
Bond yields declined across various markets, with the 10-year Treasuries yield down six basis points.
In commodity markets, West Texas Intermediate crude fell 1.7% to $83.93 a barrel, and gold futures dropped 0.3% to $1,989.50 an ounce.
(Source: Bloomberg)
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