US equity indexes declined following disappointing financial results from Microsoft and Meta Platforms, while government bond yields generally increased as investors analyzed the Federal Reserve's preferred inflation metrics. The S&P 500 fell by 1.4% to settle at 5,730.1 by midday on Thursday, the Nasdaq Composite decreased by 2.4% to 18,171.3, and the Dow Jones Industrial Average was down 0.7% at 41,853.7.
The biggest decliners included technology, consumer discretionary, and industrial sectors, whereas utilities and energy stocks showed some resilience with intraday gains. Microsoft's financial report for fiscal Q1 indicated a year-over-year improvement in earnings and sales; however, its stock dropped 5.8% intraday, making it one of the worst performers in both the Dow and Nasdaq, as investors concentrated on the growth trajectory of its Azure cloud division.
Meanwhile, Meta Platforms experienced a decline of 3.3% in its stock price after reporting Q3 results. Attention will now shift to upcoming quarterly earnings from Apple and Amazon.com, which are anticipated to be released after the market closes on Thursday. In economic indicators, the PCE price index increased by 0.2%, aligning with market expectations and resulting in a year-over-year inflation rate decrease to 2.1%, down from 2.3% in August.
The index saw a 0.1% month-over-month rise in August. The core PCE price index rose 0.3%, compared to a 0.2% increase the previous month, maintaining a year-over-year rate of 2.7%. Additionally, the Institute for Supply Management's Chicago PMI reported a drop to 41.6 in October from 46.6 in September, falling short of the anticipated 47.0.
Initial jobless claims in the US decreased to 216,000 for the week ending October 26, down from a revised figure of 228,000 in the prior week, and below the expected 230,000 based on analyst estimates. Most Treasury yields in the US saw intraday increases, with the two-year yield climbing 2.9 basis points to 4.18%, while the 10-year yield surged 4.9 basis points to 4.31%, reaching its peak since early July.
In commodity markets, West Texas Intermediate crude oil prices rose by 1.5% to $69.61 per barrel..