The S&P 500 and Nasdaq had their worst day in over a month on Thursday. Tech stocks led the decline. The S&P 500 fell 1.86% to 5,705.45.
The Nasdaq dropped 2.76% to 18,095.15. Both had their biggest one-day drops since September 3. The Dow Jones Industrial Average slid 378.08 points, or 0.9%, to 41,763.46.
Shares of key tech companies fell sharply. Amazon shares slid 6% after disappointing investors despite beating earnings estimates. Meta, Facebook’s parent, dropped over 4% after missing user growth expectations and warning of higher costs in 2025.
“I think we’re getting to the point where AI enthusiasm and potential is not enough. These companies, while still favored for long-term growth, are not delivering the growth that is priced into them,” said Ross Mayfield, investment strategist at Baird Private Wealth Management. Tech earnings this week have been mixed so far.
Alphabet’s shares rose nearly 3% Wednesday after reporting strong revenue growth. But chipmaker Intel fell over 10% as its fourth quarter guidance disappointed investors. More major tech earnings are still to come.
Tech stocks slump amid market uncertainty
The latest PCE price index showed 12-month inflation at 2.1% in September, in line with estimates and nearing the Fed’s 2% target. This data, along with the October jobs report, will inform the Fed’s rate decision on November 7.
The major averages are on track for a down week. The Dow has lost 0.8% week to date. The S&P 500 and Nasdaq are down about 1.8% and 2.3% respectively.
October has been volatile amid uncertainty ahead of the November 5 election. For the month, the Dow fell 1.3%, the S&P 500 shed 1%, and the Nasdaq slipped 0.5%. U.S. crude oil futures closed nearly 1% higher Thursday as OPEC+ may delay a planned output increase and U.S. gasoline demand rose.
Prices gained 65 cents, or 0.95%, to $69.26 per barrel. Brent crude rose 61 cents, or 0.84%, to $73.16 a barrel. Shares of Huntington Ingalls Industries, the largest U.S. military shipbuilder, plunged as much as 25% to $187.36 on Thursday, its worst ever one-day drop.
The company reported earnings of $2.56 per share, well below estimates of $3.85. Piper Sandler’s Craig Johnson remains bullish on the market long-term despite near-term uncertainty. He sees the S&P 500 reaching 6,100 by end of 2024 and 6,600 by end of 2025.
Coinbase shares sank 12%, its biggest drop since March 2023, after the company gave a weak revenue outlook amid the broader market selloff. Thursday’s market moves reflected mixed tech results, inflation data, and upcoming Fed decisions, against a backdrop of geopolitical events and market uncertainties.
