Big Tech Blues: NASDAQ Plunges 2.76% as Investors’ Fears Grow

The major indices of the New York Stock Exchange fell all at once. This is due to growing anxiety about the future performance of major technology stocks.

On the 31st (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average ended trading at 41,763.46, down 378.08 points (0.9%) from the previous trading session. The Standard & Poor’s (S&P) 500 index closed at 5705.45, down 108.22 points (1.86%) from the previous trading day, and the Nasdaq index closed at 18,095.15, down 512.78 points (2.76%).

Among major technology stocks, the decline of Microsoft (MS) and Meta was noticeable. This is due to growing concerns that investments in artificial intelligence (AI) will damage short-term profitability. Microsoft’s adjusted earnings per share (EPS) were $3.3 and sales were $65.59 billion, both exceeding market expectations. However, it plunged 6% due to the forecast that the growth of the cloud business will slow. This is the first time since October 26, 2022 that Microsoft has fallen by more than 6% in one day.

Meta also delivered strong results in both adjusted EPS and sales that exceeded market expectations. However, the stock price fell 4% as the number of daily active users (DAP) on Facebook and Instagram increased only 5% compared to the previous year, falling below expectations. Also, the fact that capital expenditures will increase significantly next year appears to have had a negative impact on investment sentiment.

Super Micro Computer, which had plummeted 33% the previous day, also plummeted more than 10% today. This is because the accounting firm resigned, saying that the statements of management and the audit committee could not be trusted. Cosmetics company Estee Lauder also fell by more than 20%. This is because they are withdrawing their annual performance forecast for next year. Nvidia also fell nearly 5%.

Apple and Amazon, which announced their earnings after the market closed, are showing mixed trends. Apple is falling nearly 2% in after-hours trading following regular trading. Apple’s third quarter sales were $94.93 billion and adjusted EPS was $1.64. It slightly exceeded market expectations.

Amazon, which fell more than 3% during regular trading, is rising more than 5% in after-hours trading. This is because the company announced performance that exceeded market expectations thanks to the growth of its cloud computing and advertising businesses. Amazon announced that it recorded earnings per share of $1.43 and quarterly sales of $158.88 billion. It significantly exceeded market expectations of $1.14 and $157.2 billion, respectively.

The September personal consumption expenditures (PCE) price index increase rate announced today was in line with expectations. The U.S. Department of Commerce announced that the PCE price index rose 2.1% in September compared to the same period last year. It decreased by 0.1 percentage points compared to the previous month. The core PCE price index, which excludes highly volatile energy and food products, rose 2.7%. It is the same as the previous month’s increase rate and is 0.1 percentage points higher than market expectations.

Hankyung.com reporter Jinyoung-gi young71@hankyung.com