Wall Street mixed, Meta slumps, ASX set to rise
On the winning side of Big Tech was Alphabet. Shares of Google’s parent company rose 3.5 percent after its latest quarterly profit and revenue easily beat analysts’ expectations.
How these types of companies do this is incredibly important to investors. The trio of Alphabet, Meta and Microsoft alone accounts for 14.5 percent of the total value of all companies in the S&P 500 index, which determines the movements of many 401(k) accounts. That means they and a handful of other Big Tech stocks could easily eclipse what hundreds of other companies are doing.
Elsewhere on Wall Street, Chipotle Mexican Grill lost 16.9 percent after the restaurant chain cited pressure on its customers, especially young people and those without high incomes. Chipotle lowered its forecast for a key key measure of sales growth this year after CEO Scott Boatwright said households earning less than $100,000 were eating out less due to concerns about the economy and inflation.
He specifically pointed to customers ages 25 to 35 who are feeling the weight of unemployment, rising student loan repayments and slower growth relative to inflation, and said he thinks restaurants in the industry are seeing something similar.
Eli Lilly, meanwhile, rose 4.4 percent after posting stronger profits and revenue than analysts expected in the latest quarter. The blockbuster cited strong growth for its Mounjaro and Zepbound drugs for diabetes and obesity, and raised its full-year forecasts for revenue and profit.
Sherwin-Williams was one of the biggest reasons why the Dow Jones Industrial Average index outperformed other indexes because the paint company may have a larger impact on that index than the S&P 500. It rose 1.2 percent after reporting a stronger profit than analysts expected in the latest quarter. This is despite what CEO Heidi Petz called “a demand environment that remains softer for longer.”
Visa also helped lift the Dow after gaining 1.3 percent following a better-than-expected earnings report.
In the bond market, Treasury yields remained relatively stable as investors tempered expectations that the Fed would cut its key interest rate in December.
According to data from CME Group, traders are still betting in this direction, but there is no longer a definitive conclusion on this matter. This came after Fed Chairman Jerome Powell warned markets the day before, saying a December rate cut was “not a foregone conclusion, far from it.”
The Fed has cut its key interest rate twice this year in hopes of stimulating a slowing job market. But officials have also said they may have to pause cuts if inflation rises above the still-high level because lower rates could worsen inflation.
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The yield on the 10-year Treasury note rose to 4.09 percent from 4.08 percent late Wednesday and from 3.99 percent the day before Powell’s warning.
In foreign stock markets, following the decision of the European Central Bank not to change the main interest rate, indices fell by 0.5 percent in France and less than 0.1 percent in Germany.
Tokyo’s Nikkei 225 index rose less than 0.1 percent after the Bank of Japan kept interest rates steady.
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