Global stocks slid Thursday as investors fretted over results from tech giants and remained risk-averse ahead of a coin-toss US election.
Data showing the US Federal Reserve’s preferred inflation measure cooled further last month — and now sits just above its long-term target — failed to boost sentiment, despite being a positive sign for future interest-rate cuts.
All three major US indices fell, with the tech-rich Nasdaq Composite Index falling nearly three percent.
Both Microsoft and Meta topped earnings estimates, but saw their share prices tumble after signaling plans to ratchet up AI investments. Microsoft ended down 6.1 percent while Meta lost 4.1 percent.
“Earnings expectations have been high and they’re meeting, but they’re not meeting to the same degree they were,” said Jack Ablin, chief investment officer at Cresset Capital Management.
Analysts have also been monitoring the rise in US Treasury bond yields amid expectations the Federal Reserve may back off significant interest rate cuts, amid US economic data that has generally been solid.
“With the US election just around the corner, many investors are adopting a more cautious stance, sparking speculation of a much-anticipated correction in the S&P 500,” said City Index and FOREX.com analyst Fawad Razaqzada.
The uncertainty of whether Kamala Harris or Donald Trump will emerge victorious in Tuesday’s election buoyed safe haven gold, which touched a fresh high of $2,790.10 an ounce on Thursday.
In Europe, both Frankfurt and Paris ended the day lower around one percent after official data showed the eurozone’s annual inflation rebounded more than expected in October due to rising food costs.
Shares in French bank Societe Generale jumped over 11 percent after it reported better-than-expected results.
Meanwhile its rival BNP Paribas saw its shares slump nearly five percent after results fell short of expectations.
London shed 0.6 percent after the new center-left government unveiled major tax hikes, mainly targeted at businesses, in its maiden budget.
“This was one of the largest increases in tax, spending and borrowing in the UK’s budget history,” said Kathleen Brooks, research director at XTB.
“For a government that planned to boost growth, they have fallen spectacularly at the first hurdle,” she added.
Tokyo fell by half a percent, weighed down by a stronger yen and a drop in stocks linked to the semiconductor industry, which also dipped on Wall Street.
The Bank of Japan decided to leave its main interest rate unchanged, saying in an outlook report that there were “high uncertainties surrounding Japan’s economic activities and prices.”
Mainland Chinese markets, however, made healthy gains following a forecast-beating manufacturing report — in a piece of rare good news for leaders struggling to boost activity in the world’s second-largest economy.
Oil prices continued their rebound, fueled by good news on demand from the United States, as well as by press reports that OPEC countries are considering postponing an increase in crude supply.
Key figures around 2030 GMT
New York – Dow: DOWN 0.9 percent at 41,763.46 (close)
New York – S&P 500: DOWN 1.9 percent at 5,705.45 (close)
New York – Nasdaq Composite: DOWN 2.8 percent at 18,095.15 (close)
London – FTSE 100: DOWN 0.6 percent at 8,110.10 (close)
Paris – CAC 40: DOWN 1.1 percent at 7,350.37 (close)
Frankfurt – DAX: DOWN 0.9 percent at 19,077.54 (close)
Tokyo – Nikkei 225: DOWN 0.5 percent at 39,081.25 (close)
Hong Kong – Hang Seng Index: DOWN 0.3 percent at 20,317.33 (close)
Shanghai – Composite: UP 0.4 percent at 3,279.82 (close)
Euro/dollar: UP at $1.0883 from $1.0856 on Wednesday
Pound/dollar: DOWN at $1.2896 from $1.2981
Dollar/yen: DOWN at 152.00 yen from 153.42 yen
Euro/pound: UP at 84.38 from 83.63 pence
Brent North Sea Crude: UP 0.8 percent at $73.16 per barrel
West Texas Intermediate: UP 1.0 percent at $69.26 per barrel
burs-jmb/nro