US equity indexes declined significantly as Microsoft and Meta Platforms posted disappointing results, while most government bond yields climbed amidst investor concerns regarding the Federal Reserve's preferred inflation metrics. The S&P 500 was down by 1.4%, closing at 5,730.1. The Nasdaq Composite fell 2.4% to 18,171.3, and the Dow Jones Industrial Average decreased 0.7% to 41,853.7.
Losses were predominantly driven by declines in technology, consumer discretionary, and industrial sectors, although utilities and energy sectors managed to gain ground during intraday trading. Microsoft revealed a year-over-year increase in fiscal Q1 earnings and sales; however, its shares plummeted 5.8% during intraday trading, which placed it among the worst performers within both the Dow and Nasdaq indexes.
Investor attention turned towards the growth metrics of the company’s prominent Azure business. Similarly, Meta Platforms experienced a 3.3% dip in share prices following its Q3 results announcement. This trend of results could continue as two other major players, Apple and Amazon.com, are set to report their quarterly results post-market hours on Thursday. On the economic front, the PCE price index registered a 0.2% increase as anticipated, effectively lowering the year-over-year rate from 2.3% in August to 2.1%.
In month-to-month comparisons, the index rose by 0.1% in August, with the core PCE price index showing an increase of 0.3%, up from a 0.2% gain seen in August. The annualized core rate remained stable at 2.7%. The Institute for Supply Management's Chicago PMI saw a decline, dropping to 41.6 in October from 46.6 in September, falling short of the expected reading of 47.0 as per a Bloomberg survey. Initial jobless claims in the United States dropped to 216,000 for the week ending October 26, down from a previously adjusted level of 228,000 and below the anticipated figure of 230,000 as reflected in analyst surveys conducted by Bloomberg. In the bond market, most US Treasury yields saw an uptick, with the two-year yield rising by 2.9 basis points to 4.18%.
The 10-year yield surged 4.9 basis points to 4.31%, reaching its highest level since early July. In commodity trading, West Texas Intermediate crude oil climbed 1.5% to settle at $69.61 per barrel..