4:15pm: Wall Street ends month in red
US stocks tumbled Thursday, led by a 2.7% drop in the Nasdaq Composite after Meta and Microsoft earnings raised concerns over Big Tech’s outlook amid rising AI costs.
The S&P 500 fell nearly 1.9%, while the Dow Jones Industrial Average shed 0.9%, leaving all three indexes with monthly losses.
3:30pm: What's in store for Apple, Amazon?
Apple Inc (NASDAQ:AAPL, ETR:APC) (Apple Inc (NASDAQ:AAPL, ETR:APC), Apple Inc (NASDAQ:AAPL, ETR:APC)) is expected to deliver a small revenue beat for the September quarter and better-than-expected guidance for the December quarter, analysts at the Bank of America have projected ahead of the iPhone maker’s Q3 earnings drop after tonight's closing bell.
Wall Street analysts on average expect Apple to report earnings per share (EPS) of $1.53 on revenue of $94.32 billion, which marks growth of about 5% year-over-year for both measures.
Meanwhile, Jefferies expects Amazon to report revenues of $157 billion for Q3, closely in line with the Street estimate of $157.3 billion.
Analysts are more optimistic about the company's operating profit, projecting $15 billion, 2.1% higher than the Street’s $14.7 billion estimate.
They estimate AWS will contribute to an overall operating profit margin of 9.5%, up from 4.2% in the prior quarter.
2:35pm: Big name movers
Thursday's big movers were mostly in negative territory.
Arm Holdings PLC (NASDAQ:ARM) (Arm Holdings PLC (NASDAQ:ARM)) fell almost 9% after Bernstein analysts hit the chip maker with a downgrade on near-term headwinds outside of the artificial intelligence (AI) sector.
Robinhood Markets Inc (NASDAQ:HOOD) (Robinhood Markets Inc (NASDAQ:HOOD)) sunk over 15% after reporting incentives aimed at drawing in customers had eaten into revenue over the third quarter.
Matches on asset transfers and individual retirement arrangement (IRA) contributions caused a $27 million reduction in revenue over the quarter, the company said in results.
Agnico Eagle Mines Ltd (TSX:AEM) (Agnico Eagle Mines Ltd (TSX:AEM)) shares moved lover 2% ower as the gold miner posted a slight cost miss for the third quarter, which cast a shadow over an otherwise positive report.
Uber Technologies Inc (NYSE:UBER, ETR:UT8) (Uber Technologies Inc (NYSE:UBER, ETR:UT8), Uber Technologies Inc (NYSE:UBER, ETR:UT8)) slumped more than 11% on Thursday after expectation-beating earnings and revenue failed to overshadow disappointing gross booking figures.
1:15pm: Disappointment affects sentiment
An air of disappointment hung in the markets on Thursday, just before more Big Tech earnings from Amazon and Apple are set to drop later today.
"Disappointing earnings by Meta, Microsoft and Starbucks amongst others led to a second straight day of losses with several major indices dropping between 1% and 2% ahead of Friday's US non-farm payrolls," IG's Axel Rudolph commented.
"The Fed's preferred PCE inflation gauge rose slightly, as expected, personal spending more-than-expected while jobless claims dropped to mid-May levels."
12:20pm: Profitability concerns hit Big Tech
Markets continued to decline on Thursday, led by the Nasdaq, which fell 2.5% amid concerns about Big Tech's profitability following earnings reports from Meta and Microsoft.
Despite beating Wall Street estimates, both companies indicated plans to increase their already high spending on artificial intelligence infrastructure, raising worries among investors.
Elsewhere, the S&P 500 dropped approximately 1.6%, while the Dow Jones fell about 0.8%, reflecting a broader market downturn.
Additionally, bond yields surged, with the 10-year Treasury rising to 4.33%, and the US dollar strengthened against other currencies. Investors also received new inflation data, with the core Personal Consumption Expenditures (PCE) index for September rising 2.7%, slightly above expectations, which may influence the Federal Reserve's upcoming policy decisions.
11:20am: Path to 2% inflation 'long and difficult'
The September PCE data indicates that while services inflation, particularly in health care and airfare, has risen, overall inflation is easing, supporting expectations for Federal Reserve rate cuts by year-end.
Consumer goods prices fell by 1.2% year-over-year, largely due to declines in durable goods and energy prices. While overall services prices have eased, they remain elevated compared to pre-pandemic levels. Prices for core services, excluding housing, also decelerated, which may align with the Federal Reserve's plans for two rate cuts by the end of the year. Additionally, both initial and continuing jobless claims decreased after temporary surges from recent storms.
"The deceleration of inflation, including the stickier components, should keep the Fed on track for cutting rates in November and December," LPL Financial's Jeffery Roach wrote. "However, investors should brace themselves for a few head fakes as the path to 2% inflation will be long and difficult."
9.50am: Nasdaqs tech giants lead slump at open
US stocks have slumped after the opening bell, led by big tech.
While the Dow Jones has dropped 0.6%, the Nasdaq has crumpled 1.8% and the S&P 500 is in between, down 1% in opening trades.
The Russell 2000 has started 0.2% lower.
Super Micro Computer Inc (NASDAQ:SMCI) is down 8%, Arm Holdings PLC (NASDAQ:ARM) 7%, Microsoft Corp (NASDAQ:MSFT) has dropped 5%, Micron Technology Inc (NASDAQ:MU), Broadcom and NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) have all dropped more than 2% so far.
9.05am: Core PCE inflation holds steady
US core PCE inflation, the Federal Reserve’s preferred gauge of price rises, held steady at 2.7% in September, which was above economists' expectations for it to fall to 2.6%.
The Bureau of Economic Analysis said the core personal consumption expenditures price index was up 0.3% in September versus the prior month, up from the 0.2% rise in August.
Consumer spending was up 0.5%, meanwhile, compared to an upwardly revised 0.3% increase the month before.
8.40am: Nasdaq set to extend losses
US stocks are heading sharply lower on Thursday, with several big tech stocks set for declines.
Futures trades for the S&P 500 point to a 0.6% fall at the open, with Nasdaq futures also down 0.6%, while Dow Jones futures are down 0.4%.
This will extend losses from the prior session, when the tech-heavy Nasdaq fell 0.6%, the S&P 500 dropped 0.3% and the Dow dipped 0.2%.
That was on the back of a rout for semiconductor companies, with the Philadelphia semiconductor index falling 3.35%, sparked by Advanced Micro Devices falling 11% on underwhelming results and server maker Super Micro Computer plunging 33% after its auditor resigned, citing “integrity” concerns.
Today, chip giant Nvidia is down 1% premarket, while elsewhere among the 'Magnificant Seven' Microsoft Corp (NASDAQ:MSFT) and Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) are seen heading down 3% and 1.8% after their earnings overnight.
This was despite Microsoft reporting better earnings than expected for its fiscal first-quarter, with the standout performer being its cloud segment, while there was a slight decline in profit margins reflecting increased investments in research and development.
Meta Platforms turned in results for the third quarter that strongly beat Wall Street estimates but said the new quarter would be below forecasts.
US core PCE inflation metric due will be the key macroeconomic news item, with traders weighing up whether it provides the basis for a more dovish stance from the Federal Reserve.
After Thursday's close it will be the turn of Apple and Amazon to report earnings.