US benchmark equity indexes closed lower on Thursday as markets anticipated financial results from major tech firms, including Apple and Amazon.com. The scheduled reports from these tech titans, along with Intel, were eagerly awaited by investors following a substantial increase in US consumer spending, which exceeded expectations in September as reported by government data.
This strong consumer activity hints at potential upward adjustments for fourth quarter growth forecasts, according to analysts at BMO Capital Markets, who noted, "the ongoing strength in consumer spending suggests upside risk to growth estimates, ruling out another 50-basis-point rate chop from the Fed next week." The analysts also pointed out that with headline inflation nearing its target and employment costs stabilizing, a move of 25 basis points remains a possibility. A closer look at employment data revealed a decrease in initial jobless claims by 12,000, bringing the total down to 216,000 for the week ending on October 26.
This figure was below the expected 230,000 and trimmed the four-week moving average to 236,500 following three consecutive increases. The latest claims represent the lowest level since May, indicating a return to more typical figures after the disruptions caused by hurricanes earlier in the month. Meanwhile, insured claims also saw a decline, dropping by 26,000 to 1.862 million in the week ending October 19 after experiencing rises in the previous weeks. On the commodities front, December West Texas Intermediate crude oil prices rose by $0.65, closing at $69.26 per barrel.
Brent crude, viewed as the global benchmark, also gained, settling at $73.13, attributed to reports suggesting OPEC+ might delay plans to increase production by 180,000 barrels per day starting in December. Meanwhile, shares of Paycom Software surged by 22% following a robust third-quarter performance that exceeded expectations, while Microsoft’s stock saw a decline of 6%.
The latter's forecasts indicated revenue growth for its Azure cloud-computing segment at approximately 31% to 32% in constant currency for the upcoming fiscal quarter. In the reported period, Microsoft reported a solid 34% year-over-year increase for Azure and affiliated cloud services after adjusting for currency fluctuations..