Stock Market Today: Stock Struggle After Meta, Microsoft Earnings

Shares fell at the open and remained low through Thursday’s close, with the weight of unmet earnings expectations for several Magnificent 7 shares pulling major indexes into the red.

Data still indicates stabilization inflation and still healthy employment situations were promoted interest rates higher at the beginning of the session. However, the chances of a rate cut remain stable, a day ahead of the release of the October non-farm payrolls report.

According to today’s economic news, the personal consumption and expenditure (PCE) price index rose 0.2% in September. Bureau of Economic Analysisan increase from September’s 0.1%, but in line with the consensus forecast.

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The core PCE, excluding food and energy, rose 0.3%. Core PCE is the Federal Reserve’s preferred inflation measure.

The 2.1% year-over-year increase for total PCE was the lowest since February 2021, down from 2.3% in August. The core PCE, meanwhile, remained stable at 2.7% year-on-year.

Ten-year government bond yields rose almost seven basis points overnight to 4.33%, before remaining essentially flat at 4.28%, although the main benchmark rose almost a full percentage point, or 100 basis points, in about a month , has increased.

The futures market for fed funds continues to reflect a more than 90% probability that the central bank will cut its benchmark interest rate by a quarter of a percentage point at next week’s Federal Open Market Committee meeting.

Employment and inflation

Complementing the PCE data, initial unemployment claims for the week ending Oct. 26 came in at 216,000 on a seasonally adjusted basis, down 12,000 from the previous week’s revised level, according to the Ministry of Labor.

“The big picture is that inflation continues to fall, albeit with some bumps (as in September),” says Son Vargheseglobal macro strategist at Carson Group. “This report is unlikely to change expectations that the Fed will cut rates by 25 basis points at its November meeting, but the December decision may still be up in the air depending on upcoming wage and inflation data.”

The Bureau of Labor Statistics (BLS) will release its summary of the employment situation for October on Friday at 8:30 a.m. Eastern Time. A consensus compiled by FactSet predicts nonfarm payroll growth of 120,000, up from 254,000 in September.

The BLS said workers are striking at companies such as Boeing (BA) will reduce nonfarm payrolls by 41,000. The impact of recent hurricanes in Florida and North Carolina has yet to be quantified.

Economists expect the unemployment rate to remain stable at 4.1%.

The S&P500 fell by 1.9% to 5,705 at the end of October. The Dow Jones Industrial Average fell 0.9% and closed the month at 41,763. The Nasdaq Composite lost 2.8% to 18,095 this Halloween.

And that’s all about the seriousness of the Magnificent 7. It’s just math: their collective valuation means they make up big chunks of capitalization-weighted indexes, and if they move, those indexes will move with them.

The Magnificent 7 Report

Indeed, pre-market trading indicated that today’s gap-down was open, as two Mag 7 clockmakers posted solid operating and financial numbers after Wednesday’s closing bell but failed to meet expectations. Wall Street‘s beat-and-raise cadence this time.

Investment budgets for Big Tech continue to grow, although investors and analysts alike continue to hope for an improvement in returns on their significant investments in artificial intelligence (AI).

Metaplatforms (META) shares fell 4.1%, even behind parent companies Facebook, Instagram and WhatsApp better than the top and bottom line estimates for its third quarter.

User growth figures fell short of expectations and Meta’s capital budget rose 36% to $9.2 billion in the third quarter. Management said in a statement that it expects a “significant acceleration” of capital spending in 2025.

Like META, Microsoft (MSFTShares fell 6.1% after the tech giant beat top and bottom-line expectations for the first quarter of 2025, but issued guidelines that fell short.

Management forecasts Azure revenue growth of 31% to 32% versus expectations of 32.25%. Azure revenue rose 33% during the fiscal first quarter. Microsoft’s third-quarter capital expenditures rose 5% to $20 billion.

With results from both META and MSFT Tesla (TSLA) And Alphabet (GOOGL) in the books, Amazon.com (AMZN) And Apple (AAPL) are in the income calendar spotlight after tonight’s closing.

Nvidia (NVDA) will be the last of the Mag 7 reporting on November 20.

Carvana rises after earnings, Uber slumps

Carvana (CVNAShares rose 19.3% after the online used car retailer posted a top-line revenue and profit performance for the third quarter and published strong guidance for the fourth quarter.

“The third quarter was another exceptional quarter for Carvana. We achieved record performance on virtually every key financial measure,” Carvana CEO Ernie Garcia said in a statement.

“Most importantly, our customer experiences, our financial performance and our growth rate continue to differentiate us from the rest in our industry. Today, we are the most profitable and fastest growing automotive retailer and there is much more to do.”

One analyst sees it There is much more benefit to CVNA.

Uber Technologies (UBER) Shares fell 9.3% after the ride-hailing company beat top- and bottom-line expectations for the third quarter but fell just short of expectations for gross bookings.

In keeping with the theme of the day, Uber also released guidance for the fourth quarter that was just below expectations.