The parent company of Facebook, meanwhile, likewise served up a better-than-expected profit report. As with Microsoft, that wasn’t enough to boost its stock. Investors focused instead on Meta Platforms’ warning that it expects a “significant acceleration” in spending next year as it continues to pour money into developing artificial intelligence. It fell 4.1 per cent.
Both Microsoft and Meta Platforms have soared in recent years amid a frenzy around AI, and they’re entrenched among Wall Street’s most influential stocks. But such stellar performances have critics saying their stock prices have simply climbed too fast, leaving them too expensive. It’s difficult to meet everyone’s expectations when they’re so high, and Microsoft and Meta were both among Thursday’s heaviest weights on the S&P 500.
Apple, the world’s most valuable company, fell 2 per cent in after-hours trading after reporting weaker-than-anticipated sales in China. Amazon.com climbed 4 per cent after projecting profit and revenue in the current quarter that exceeded analysts’ estimates on optimism for a strong holiday shopping season. They’re the latest companies in the highly influential group of stocks known as the “Magnificent Seven” to do so.
Earlier this month, Tesla and Alphabet kicked off the Magnificent Seven’s reports with results that investors found impressive enough to reward with higher stock prices.
The lone remaining member, Nvidia, will report its results later this earnings season, and its 4.8 per cent drop was Thursday’s heaviest weight on the market after Microsoft. Expectations are just as high for the chip company after its stock soared over 880 per cent in the last two years.
The tumble for Big Tech on the last day of October wiped out the S&P 500’s gain for the month. The index fell 1 per cent for its first down month in the last six, even though it set an all-time high during the middle of it.
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In the bond market, Treasury yields edged lower following a mixed set of reports on the US economy.
One report said a measure of inflation that the Federal Reserve likes to use slowed to 2.1 per cent in September from 2.3 per cent. That’s almost all the way back to the Fed’s 2 per cent target, though underlying trends after ignoring food and energy costs were a touch hotter than economists expected.
A separate report said growth in workers’ wages and benefits slowed during the summer. That could put less pressure on upcoming inflation. A third report, meanwhile, said fewer US workers applied for unemployment benefits last week. That’s an indication that the number of layoffs remains relatively low across the country.
