Wall Street sinks for second consecutive day as tech stocks slump

The war-induced risk-off sentiment remains a heavy cloud over the global stock markets, pushing Wall Street into a second consecutive day of decline. The Nasdaq Composite has plunged into correction territory, marking a 10% drop from its year-high in July, primarily due to a tech sector downturn triggered by mixed earnings results.

Major technology giants bore the brunt of the downturn, with all mega-cap tech stocks seeing declines ranging from 1% to 4%. Notably, Meta Platforms, the parent company of Facebook, slumped by 3.7% after warning of weakening advertising demands and increased spending on its Reality Labs division.

Amazon’s stocks initially surged during regular trading hours, only to trim gains in after-hours trading following a mixed earnings report. The online retail behemoth reported revenue of US$143.1 billion, representing a 13% year-on-year increase, the fastest growth rate since the third quarter of 2022. However, Amazon’s cloud computing arm, Amazon Web Services (AWS), posted revenue of $23.1 billion, up 12% from the previous year but slightly lower than the expected $23.2 billion.

In the S&P 500, eight out of eleven sectors closed lower, with Communication Services and Technologies leading the losses, down 2.58% and 2.17%, respectively. On the flip side, the Real Estate sector managed to outperform thanks to a slump in bond yields, ending the day 2.15% higher. Utilities and Materials also posted gains, rising by 2.15% and 0.72%, respectively.

Meanwhile, Intel, the multinational semiconductor giant, saw its shares jump by more than 7% following better-than-expected third-quarter earnings. The chipmaker managed to surpass expectations for both profit and revenue, thanks to a series of effective cost-cutting measures. However, Intel’s revenue continued its seven-consecutive quarterly decline, standing at US$14.16 billion.

Investor focus now shifts to the upcoming release of Core Personal Consumption Expenditure (PCE) inflation data for September, scheduled for 13:30 GMT. This crucial metric is expected to sway the Federal Reserve’s decision-making process leading up to its November 1 monetary policy meeting.