Meta Platforms suffered its worst one-day drop since February
Author of the article:
Bloomberg News
Isabelle Lee and Vildana Hajric
An Apple store in Bordeaux, France. Photo by Regis Duvignau/Reuters files Wall Street contended with another volatile session as investors mulled the Federal Reserve’s path of interest-rate hikes while assessing mixed economic data and a slew of earnings reports.
Advertisement 2 This advertisement has not loaded yet, but your article continues below.
Amazon.com Inc. plunged after hours as its sales forecast trailed estimates. Shares of Apple Inc. also fell postmarket despite largely beating expectations.
FP Investor By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300
The S&P 500 closed lower, after swinging between gains and losses for most of the session. The Nasdaq 100 fell more than one per cent in regular trading and an exchange-traded fund tracking it slid further after 4 p.m. in New York. Lackluster earnings from several megacap firms this week dampened sentiment and underscored the impact of the Fed’s tightening regime. Meta Platforms Inc. suffered its worst one-day drop since February on Thursday, triggered by burgeoning metaverse costs and a decline in revenue.
Markets were also mixed on U.S. gross domestic product data. The report showed the U.S. economy rebounded after two quarterly contractions, which briefly assuaged concerns of an imminent recession. But it also highlighted that consumer spending remains under pressure because of inflation. Treasuries gained, with the 10-year yield pushing below four per cent on speculation of a Fed pivot. The dollar snapped a two-day drop.
Advertisement 3 This advertisement has not loaded yet, but your article continues below.
The stock and currency markets digested the GDP data differently because it’s difficult to tell what the Fed is planning to do next, said Fiona Cincotta, senior financial markets analyst at City Index.
“The U.S. dollar is reading into this that perhaps it’s going to keep the Fed on that hawkish path for longer,” Cincotta said by phone. “Whereas the stock market seems to be reading it completely differently, almost as if it’s expecting the Fed to be sort of moving toward that less hawkish stuff.”
Economists still expect the Fed to hike by three-quarters of a percentage point for the fourth time in a row when it meets next week. But with recent data highlighting the effects of the Fed’s sharp rate hikes on the economy, investors expect the central bank to slow its pace of tightening after November’s meeting.
Advertisement 4 This advertisement has not loaded yet, but your article continues below.
“It’s not about a pivot and cutting interest rates,” Alec Young, chief investment strategist at MAPsignals, said in an interview. “It’s just about the Fed becoming more data-dependent and acknowledging there’s already a lot of tightening in the pipeline from all the rate hikes they’ve put through so far.”
Earlier, the European Central Bank lifted its policy rate by 75 basis points — in line with expectations — and signaled more tightening ahead. But ECB officials weren’t unanimous about the size of the interest-rate hike and sought to avoid giving a specific signal on their next move in December, according to people familiar with the matter.
Some of the main moves in markets:
Stocks The S&P 500 fell 0.6 per cent as of 4 p.m. New York time The Nasdaq 100 fell 1.9 per cent The Dow Jones Industrial Average rose 0.6 per cent The MSCI World index was little changed This advertisement has not loaded yet, but your article continues below.
Article content Currencies The Bloomberg Dollar Spot Index rose 0.4 per cent The euro fell 1.1 per cent to US$0.9971 The British pound fell 0.4 per cent to US$1.1575 The Japanese yen rose 0.1 per cent to 146.20 per dollar Retail investors take shelter in cash after stock market rout David Rosenberg: These economies are best positioned to withstand rising interest rates Investors need to leave the past in the past and focus on doing the right thing in the present Cryptocurrencies Bitcoin fell 0.6 per cent to US$20,630.98 Ether rose 0.6 per cent to US$1,562.65 Bonds The yield on 10-year Treasuries declined seven basis points to 3.93 per cent Germany’s 10-year yield declined 15 basis points to 1.96 per cent Britain’s 10-year yield declined 17 basis points to 3.40 per cent Commodities West Texas Intermediate crude rose 1.3 per cent to US$89.01 a barrel Gold futures fell 0.2 per cent to US$1,665.50 an ounce — With assistance from Elaine Chen, Emily Graffeo and Peyton Forte.