Good afternoon. Right now, investors seem to be reeling from the busiest Wednesday that we've had in recent memory, full of memorable remarks from Fed Chair Jerome Powell and a surprising row of earnings.
While delivering a quarter point interest rate cut, as widely expected, Fed Chair Jerome Powell said in remarks that an interest rate cut at the forthcoming December Fed meeting was not a certainty. In fact, it was, "far from a foregone conclusion." That comment inspired a selloff in U.S. equities, followed by a brief recovery.
It came too soon, though. While Google parent Alphabet knocked its earnings out of the park, delivering its first $100 billion revenue quarter, there were some misfires from its megacap companions. Microsoft earnings, which came in line, but showed signs of slowdown in its Azure cloud business. But far away the worst performer was Meta, which took a nearly $16 billion one-time tax charge, hammering the stock. Today, they're +4.9%, -3.5%, and -11.9%, respectively.
Thursday Reading:.
Their poor performances have boiled up to the S&P 500, which has rallied to record highs despite having some of the worst breadth in its history. In the last few days, nearly four-fifths of the index has been in the red, while a narrow pocket of megacap giants and tech names have lifted the index. But today, it's opposite day; while the broader index is performing, the index is sagging (-0.50%) from the megacap earnings. The Nasdaq Composite (-1.1%) is also down.
Thankfully, there will be more shots on goal, with results from Apple and Amazon set to round out the busiest day of earnings season thus far. This morning's results were positive, as Eli Lilly, Mastercard, and Merck all beat on top and bottom lines. Whether positive results from the megacaps can right the ship remains to be seen, but there's still a lot of earnings season left.
TurboTax Via TheStreet
-- Noah Weidner, Markets Reporter
