Quarterly earnings reports from Microsoft (MSFT) and META dropped late on Wednesday evening. Despite the raw numbers being positive overall – even beating estimates – the burden of funding various AI ventures is beginning to spook some market participants. Profitability concerns are beginning to weigh on the tech sector in general and such worries were reflected in many stock prices yesterday. MSFT opened low and fell lower still, losing 6% on the day; META and Nvidia (NVDA) also both closed the session lower, losing 4.1% and 4.7% respectively.
Poor performances carried over to the wider Nasdaq Composite index, which lost 2.8% yesterday. Although mostly confined to the tech sector, the S&P 500 and Dow Jones also underperformed, the former falling 1.9%, the latter 0.9%.
A mixed bag of US economic data confused currency markets over the last couple of sessions. Wednesday’s employment change came in much better than expected, but Q3 GDP growth missed estimates at 2.8% instead of 3%. Thursday’s Core PCE price index edged slightly above expectations for the yearly figure although the result was hardly catastrophic.
The Dollar has been off the boil a little this week, the DXY losing another 0.2% yesterday to close below 104. The British Pound also suffered on Thursday in response to the new budget unveiled by the UK government, Cable losing half a percent against the Greenback. The Yen on the other hand gained 0.9% on the Dollar following the Bank of Japan’s decision to maintain rates at 0.25%.
With the US election less than a week away, no asset is immune to market volatility. This Friday, traders face the added threat of Non-Farm Payrolls, which currently forecast an additional 113k jobs. Treacherous waters out there.
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