On Thursday, the S&P 500 Index erased all gains for October, halting its longest monthly rise since August 2021, as Microsoft and Meta Platforms reported disappointing guidance.

The S&P 500 Index fell 1%, the Nasdaq 100 Index dropped 1.5%. The Dow Jones Industrial Average decreased by 0.6%. Bloomberg's measure of the 'seven giants' index fell 1.8%. Nvidia briefly dropped nearly 5%, while Tesla rose over 0.8% in early trading before falling more than 1.9%. Meta briefly declined nearly 3.3%. Google A rose nearly 1.4% before turning negative. Amazon briefly fell over 2.9%, and Microsoft briefly dropped nearly 6%. Apple briefly fell nearly 1%.

The S&P 500 Index will record a monthly decline

Meanwhile, as traders scaled back bets on aggressive Fed rate cuts and the economy showed strong signs, U.S. Treasuries experienced their most severe monthly sell-off in about two years, causing U.S. Treasury yields to surge.

Microsoft's latest quarterly profit growth exceeded analysts' expectations, and revenue also surpassed forecasts. However, due to investors and analysts closely examining potential disappointing scenarios, the company's stock still plummeted. Many are focused on Microsoft's forecast for future growth in its Azure cloud computing business, which is below some analysts' expectations.

At the same time, Facebook's parent company, Meta Platforms, also reported better-than-expected profit results. For the company, investors are focused on Meta Platforms' warning that as the company continues to invest in developing artificial intelligence, expenditures are expected to 'accelerate significantly' next year.

In recent years, the stock prices of Microsoft and Meta Platforms have surged, largely due to excitement over artificial intelligence, establishing themselves among the most influential stocks on Wall Street. However, their outstanding performance in the stock market has led critics to argue that the stock prices have risen too quickly, making them too expensive and raising high expectations for their earnings.

Among the influential stocks known as the 'seven giants', the next two companies to announce their latest earnings are Apple and Amazon. They will release their financial reports after the trading day ends.

Quincy Krosby, Chief Global Strategist at LPL Financial, said, 'Overall, the market is disappointed with the guidance from large tech companies, especially Meta's AI spending, and the speed of AI integration with Microsoft's cloud platform is below expectations. Additionally, there is an almost obvious notion that elections will not bring certainty to the market, but rather will have the opposite effect, leading to significantly increased volatility.'

Wall Street is also waiting for the test of non-farm data on Friday. Prior to this, U.S. jobless claims fell to the lowest level since May last week, as southeastern states continued to recover from the impact of two severe storms. The Fed's preferred gauge of potential inflation recorded its largest monthly increase since April, providing justification for a slower pace of rate cuts following last month's significant easing.

Article reposted from: Jinshi Data