Shares mixed after Google parent Alphabet's earnings disappoint
Alphabet shares fall 10% on disappointing revenues, while Microsoft gains 3% on better-than-expected earnings.
Quick Look
- US technology giants' earnings shake markets as Alphabet shares drop 10% over AI revenue concerns, while Microsoft gains 3%.
- Meanwhile, global stock indices, bond yields, and oil prices fluctuate following Federal Reserve decisions.
AI-generated summary
Why It Matters
US tech companies face high investor expectations driven by the global artificial intelligence boom. The Federal Reserve held interest rates steady during its policy meeting.
The latest round of US technology giants’ earnings have shaken markets riding on high expectations from investors due to the global craze for artificial intelligence.
Shares of Google parent company Alphabet Inc. fell about 10% in after-hours trading. The California-based technology giant posted quarterly revenues that disappointed investors, raising questions over whether it can generate enough sales to justify its huge investments in AI.
Shares in Microsoft, however, gained nearly 3% in after-hours trading as it logged better-than-expected earnings results.
On Wednesday, Wall Street’s benchmark S&P 500 added 0.3% and the Dow Jones Industrial Average gained 0.2%. The technology-heavy Nasdaq composite climbed 0.3%.
In the bond market, the yield on the 10-year US Treasury eased to below 5.00% after briefly jumping to around 5.04% Wednesday. The yield on the two-year Treasury also steadied to 4.68%, down from higher than 4.77% on Wednesday.
In other dealings early Thursday, Brent crude oil, the international standard, fell 1.2% to $110.32 per barrel. That's still way higher than the roughly $72 a barrel level it was at before the Iran war began in late February.
Benchmark US crude fell 1.3% to $101.46 per barrel.
The US dollar fell to 157.72 Japanese yen from 157.84 yen. The euro was trading at $1.1146, down from $1.1154.
Meanwhile, investors were also digesting the latest news from the Federal Reserve. As anticipated, it held rates steady as it wrapped up its policy meeting on Wednesday. Two Fed officials were in favour of a hike, and a rate hike in December is likely since inflation remains too high, analysts said.
Markets are watching for the outcome of a meeting of the European Central Bank later today. The Bank of Japan is expected to stand pat when it wraps up its policymaking meeting on Friday.
Oil prices fell more than 1% even as US officials warned that renewed military action against Iran could come after the 3 November midterm elections.
In Asian trading, Japan’s Nikkei 225 edged up 0.2% to 64,073.17. OpenAI investor SoftBank Group's shares fell 0.5%.
In South Korea, the Kospi index lost 2.2% to 5,880.25.
Samsung Electronics, a key component of the Korean market, sank 5.4% despite announcing strong quarterly results as its latest shareholder return policy arrangements disappointed some investors. Memory chipmaker SK Hynix rose 1.6%. Its shares soared 10.9% the day before on the company’s better-than-expected quarterly results.
The Taiex in Taiwan, which has also benefited from the AI boom, declined 1.9%.
Hong Kong’s Hang Seng edged less than 0.1% higher, to 23,101.86. The Shanghai Composite index shed 0.9% to 3,647.12.
Australia’s S&P/ASX 200 gained 0.5% to 8,888.50.
What to Watch
AI outlook — possibilities, not facts
Bank of Japan to stand pat at policymaking meeting
Likely · Within days
Potential renewed US military action against Iran after November 3rd
Possible · Within months
Open Questions
- Will the Federal Reserve raise interest rates in December?
- How will the European Central Bank respond to current economic conditions?
