Wall St extends losses as Meta, Microsoft highlight AI costs
Meta Platforms, Microsoft drag megacaps lower
Estee Lauder on track for worst day on record
September PCE data in line with estimates
Indexes down: Dow 0.65%, S&P 500 1.62%, Nasdaq 2.58%
Updates to midafternoon
By Abigail Summerville
Oct 31 (Reuters) - U.S. stocks slumpedon Thursday after Microsoft and Meta Platforms highlighted growing artificial intelligencecosts that could affect their earnings, curbingenthusiasm for megacap stocks that have fueledthe market rally this year.
Shares of Facebook-owner Meta PlatformsMETA.O dropped 4.5%, while MicrosoftMSFT.O fell 5.6%, despiteboth companies beating earnings estimates in results reported after the bell on Wednesday.
Other so-called Magnificent Seven megacap technology stocks also slipped. Amazon.com AMZN.O fell 3.6%and Apple AAPL.O dropped 1.4%ahead of their quarterly results, due after the market close. Shares ofAlphabet GOOGL.O, which reported on Tuesday, fell 1.7%.
"You had three of the Magnificent Seven all say they basically have open-ended budgets for AI spend and investors don't like to hear that," said Carol Schleif, chief investment officer at BMO Family Office.
"The intermediate and longer-term implications of this buildout are really important for U.S. long-term growth and long-term productivity. ... In the short run, investors are asking where's the profit from it?"
Microsoft and Meta both said their capital expenses were growing due to AI investments, which could reduce profitability.
The benchmark 10-year Treasury note yield US10YT=RR also rose, breaching 4.3%, further pressuring equities.
The Personal Consumption Expenditures price index, the Federal Reserve's preferred inflation metric, rose 0.2% in September, in line with economists' expectations. However, the core figure was 2.7% year-over-year, slightly abovethe 2.6% forecast, while consumer spending increased a little more than expected.
After the data, traders stuck to bets for a 25-basis-point rate reduction in the Fed's November meeting.
"We do expect them to cut by a quarter next week because there is nothing in the data this week that should throw them off of that," Schleif said.
By 2:15 p.m. ET (0815 GMT), the Dow Jones Industrial Average .DJI fell 275.71 points, or 0.65%, to 41,865.83. The S&P 500 .SPX lost 94.37 points, or 1.62%, at 5,719.29 and the Nasdaq Composite .IXIC slid 480.17 points, or 2.58%, to 18,127.76.
The information technology sector .SPLRCT slumped 3.4%, on track for its worst day since early September. Upbeat results from ConocoPhillips COP.N and Entergy ETR.N lifted energy .SPNY and utilities .SPLRCU.
An index of chip stocks .SOX slumped 4.4%,led by a 19%loss in Monolithic Power Systems MPWR.O following its results. Nvidia NVDA.O lost 4.6%.
The VIX .VIX, Wall Street's "fear gauge," touched its highest since early September asinvestors braced for more volatility in the next few weeks from corporate results and the Nov. 5U.S. presidential election followed by the Fed's policy-setting meeting.
Estee Lauder EL.N plummeted 20.5%, on track for its worst day on record, after the cosmetics company withdrew its 2025 annual forecasts.
Shares of Uber Technologies UBER.N plunged 11.4% after the ride-hailing company forecast fourth-quarter gross bookings below expectations.
Declining issues outnumbered advancers by a 2.24-to-1 ratio on the NYSE, and by a 2.65-to-1 ratio on the Nasdaq.
The S&P 500 posted 23 new 52-week highs and eight new lows while the Nasdaq Composite recorded 51 new highs and 138 new lows.
The Magnificent Seven https://reut.rs/4fgLCgW
S&P 500 ahead of US presidential elections https://reut.rs/3NNjZQM
Reporting by Abigail Summerville in New York; Editing by Richard Chang
Aset Berkaitan
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
