But new data shows inflation fell closer to the Fed's annual 2% target as the economy shows resilience before Election Day
The Dow Jones Industrial Average fell more than 250 points Thursday mid-morning, alongside sharp Nasdaq $NDAQ and S&P 500 declines, following earnings reports from Microsoft $MSFT (MSFT) and Meta $META (META), as both tech giants grapple with challenges in meeting the surging demand for AI. Meta stock fell about 3% in Thursday trading, while Microsoft stock dropped more than 5%.
Super Micro Computer (SMCI) stock continued to fall following the resignation of Ernst & Young, the company’s auditor, and now it faces potential delisting from the Nasdaq
Shares of crypto-friendly companies like Coinbase (COIN), MicroStrategy (MSTR), and Robinhood (HOOD) also slipped after releasing their earnings a day earlier.
In afternoon trading, the Dow was down 248 points, or 0.5%, while the tech-heavy Nasdaq slumped 421 points, or 2.2%. The S&P 500 was down 1.4%.
Positive news on the economic front came in the form of a significant drop in U.S. initial unemployment claims to a five-month low, indicating a resilient labor market. The Labor Department reported Thursday that initial claims for state unemployment benefits fell by 12,000 to a seasonally adjusted 216,000 for the week ending Oct. 26, surpassing economists’ expectations of 230,000 claims.
And inflation continues to cool, as the Personal Consumption Expenditures (PCE) price index — the Fed’s preferred inflation gauge — showed a 2.1% year-over-year increase for September, down from 2.3% in August, according to data released Thursday. This inflation slowdown, almost all the way to the Fed’s target of 2% annual inflation, was a hopeful signal for consumers and the Fed alike as it plans to continue cutting interest rates.
Apple’s (AAPL) fourth-quarter report Thursday will be the first glimpse into sales since Apple unveiled its latest slate of iPhones and new artificial intelligence features, known as Apple Intelligence, at its annual event in early September — and Wall Street is expecting a strong quarter of yearly growth.
Analysts are expecting earnings per share of $1.60 for Apple’s fourth fiscal quarter, according to estimates compiled by FactSet (FDS). Net income is projected to reach $24.24 billion, which would represent more than 5% growth from the same period a year ago.
Apple has had a strong year over all. Its shares are up about 25% year-to-date, just beating the S&P 500 index.
Amazon is set to report third-quarter earnings on Thursday, after slightly missing expectations in its last quarter.
The retail and cloud giant is expected to report revenues of $157.3 billion for the quarter ended in September, according to analyst estimates compiled by FactSet. Amazon is expected to report earnings per share, or EPS, of $1.14. In the last quarter, the company issued lower-than-expected guidance for the third quarter, setting revenue expectations between $154 and $158.5 billion — or between 8% and 11% year over year growth.
In the second quarter, Amazon reported revenues of $148 billion — a 10% increase from the previous year, but still below expectations of $148.7 billion, according to FactSet. However, the company reported net income of $13.5 billion in the second quarter, which was above expectations of $11 billion.
Amazon Web Services, Amazon’s cloud-computing division, reported $26.3 billion in revenue, which was up 19% year over year.
– Rocio Fabbro and Britney Nguyen contributed to this article.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
