On October 31, 2024, Microsoft and Meta both reported impressive earnings, yet their stock prices fell sharply, highlighting a growing concern among investors regarding their capacity to expand data center operations. Microsoft’s stock dropped 6% despite reporting quarterly sales of $65.6 billion, a 16% increase year-over-year, and higher-than-expected profits. Analysts expressed worries about the growth estimates for Azure, Microsoft's cloud service, which has been a critical driver of its revenue [385de8da].
Similarly, Meta's stock fell 3.6% following a strong profit report, as the company warned of increased spending on artificial intelligence initiatives. This downturn in stock prices occurred even as the broader market indices reflected a significant decline, with the S&P 500 down 1.6%, the Dow Jones falling 418 points (1%), and the Nasdaq down 2.4% [385de8da].
The economic backdrop remains complex, with the U.S. GDP growth for the third quarter reported at an annual rate of 2.8% and inflation declining to 2.1% in September, the lowest since early 2021 [7723ff0f]. Jobless claims also dropped to 216,000 for the week ending October 26, indicating a tightening labor market [7723ff0f].
In the tech sector, Alphabet reported a robust 15% revenue increase, with its Google Cloud division seeing a remarkable 35% growth, bringing in $11.4 billion [fac5f158]. However, the bond market is reacting to these developments, with 10-year U.S. Treasury yields climbing above 4.3%, reflecting limited prospects for Federal Reserve interest rate cuts [1b8d6d31].
As the week progresses, traders are closely monitoring the release of U.S. GDP growth estimates and inflation data, which are expected to further influence market dynamics [1b8d6d31]. Globally, stock markets are experiencing fluctuations, with London, Paris, and Frankfurt closing lower, while Asian markets showed mixed results [c9bb431b].
In other news, Hello Kitty celebrated its 50th anniversary with various events, showcasing the enduring popularity of the character [7723ff0f]. Google Maps has also introduced new AI features, surpassing 2 billion monthly users, reflecting the increasing integration of technology in daily life [7723ff0f].