US benchmark stock indexes fell following disappointing quarterly results from Microsoft and Meta Platforms, alongside a rise in government bond yields as investors weighed the Federal Reserve's preferred inflation data. The S&P 500 decreased by 1.4% to 5,730.5 around midday Thursday, while the Nasdaq Composite fell 2.4% to 18,171.2, and the Dow Jones Industrial Average dropped 0.7% to 41,853.7.
The technology, consumer discretionary, and industrial sectors led the decliners, whereas utilities and energy emerged as top gainers during the day. Microsoft reported a year-over-year increase in fiscal Q1 earnings and sales; however, its shares plummeted 5.1% intraday, making it one of the poorest performers in both the Dow and the Nasdaq as investors fixated on growth in the key Azure business. Shares of Meta Platforms fell 3.9% post-reporting Q3 results.
Investors are also awaiting quarterly results from two more major companies, Apple and Amazon, set to be announced after the bell on Thursday. In economic news, the PCE price index exhibited a 0.2% increase, as anticipated, reducing the year-over-year rate to 2.1% from 2.3% in August. The price index increased by 0.1% month-over-month in August, while the core PCE price index rose as expected by 0.3%, contrasting with a 0.2% rise in August.
The year-over-year rate held steady at 2.7%. Despite the improving inflation rates edging closer to the Fed's target of 2%, underlying measures such as the core have decelerated the pace of improvement. Lindsey Piegza, Chief Economist at Stifel, commented, 'While the progress thus far has been welcome and warrants a less firm pace of policy, the [Federal Open Market] Committee should not lose focus as a return to price stability is not yet a foregone conclusion.' The Institute for Supply Management's Chicago PMI reading fell to 41.6 in October from 46.6 in September, missing expectations for a 47.0 print in a Bloomberg survey.
This index indicates faster contraction, aligning with readings from other reports but contrasting with the Philadelphia Fed's indication of expansion. The national ISM manufacturing index is anticipated to be released Friday. Initial jobless claims in the US decreased to 216,000 for the week ending October 26, down from an upwardly revised level of 228,000 the previous week, surpassing expectations set at 230,000 according to a Bloomberg analyst survey.
The four-week moving average also fell, dropping by 2,250 to 236,500. Most US Treasury yields increased during the day, with the two-year yield rising 1.6 basis points to 4.17%. Meanwhile, the 10-year yield climbed 2.6 basis points to 4.29%, marking its highest point since early July. West Texas Intermediate crude oil prices edged up 0.6% to $69.05 per barrel, while gold fell 1.8% to $2,750.11 per ounce, and silver dipped 4% to $32.72 per ounce..