The Market Brief
Hey team. Stocks continued to decline on the busiest day of the earnings season as investors assessed the results from Microsoft and Meta , alongside economic data that complicated the outlook for potential interest-rate cuts by the Federal Reserve.
Let’s re-cap Wednesday’s session and see what’s next!
Impact Snapshot
🟥 PCE Inflation - 8:30am
🟥 Unemployment Claims - 8:30am
Key Earnings after close: AAPL 0.00%↑ AMZN 0.00%↑ INTC 0.00%↑
Macro Viewpoint
Wall Street futures fell sharply on Thursday after Meta Platforms and Microsoft issued warnings about increasing AI-related expenses, which dampened the optimism surrounding major tech stocks. META 0.00%↑ MSFT 0.00%↑
Investors are beginning to question whether these companies can maintain profit growth while increasing spending on artificial intelligence and cloud services.
The decline in these two stocks accounted for half of the losses in Nasdaq futures.
While enthusiasm for AI-driven tech stocks pushed Wall Street to record highs this year, this investor optimism has led to extremely high stock valuations.
Among S&P 500 companies that have reported earnings so far, 77.4% have exceeded analysts' expectations, close to the 79% average beat rate over the past four quarters.
