US tech shares fall sharply after Alphabet and Microsoft earnings disappoint

Tech stocks extended their slide on Wednesday, with the Nasdaq down 2 percent at the opening bell after disappointing results from Alphabet and Microsoft.

Google parent Alphabet reported a sharp slowdown in its search advertising business, sending its shares down 7.6 percent. Microsoft shares fell 7.8 percent after warning that revenue growth from cloud computing had slowed. Shares in Meta, which reports later on Wednesday, fell 4 percent.

The technology-heavy Nasdaq 100 index has lost more than 30 percent of its value this year as investor fears have grown over the prospects of big tech companies.

Wall Street’s broad S&P 500 index was down 0.5 percent. Investors scrutinize the company’s results for signs that high inflation and slowing economic growth are affecting the company’s profits.

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In government bond markets, the yield on 10-year US Treasuries fell by 0.043 percentage points to 4.06 percent.

The dollar eased 0.5 percent against a basket of six other currencies and has now erased its gains since the beginning of the month.

Chris Turner, ING’s global head of markets, attributed the dollar’s recent moves less to “any kind of devaluation” of the US economy and more to investors looking for deals in other countries. US consumer confidence worsened in October after two months of gains, according to an index released on Tuesday.

In Europe, the regional Stoxx Europe 600 index fell 0.4 percent and Germany’s Dax was trading flat. The moves came as Deutsche Bank, the country’s biggest lender, reported its highest third-quarter pre-tax profit since before the financial crisis, largely due to rising interest rates.

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The European Central Bank will meet on Thursday and is widely expected to raise borrowing costs by 75 basis points for the second month in a row, to 1.5 percent, to reduce inflation that fell to 10 percent in the year to September. .

The ECB warned on Tuesday that tight monetary policy and falling consumer confidence had caused a sharp drop in demand for home loans. However, demand for corporate loans increased during the same period as companies dealt with higher costs and lower demand.

Still, Gergely Majoros, a member of the investment committee at Carmignac, said falling natural gas prices in Europe and expecting the US Federal Reserve and the ECB to start raising rates more slowly in the fourth quarter and into the new year mean that investors. “Short-term fears are greatly reduced”.

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London’s FTSE 100 index fell 0.5 percent in afternoon trade, while the yield on 10-year bonds lost 0.01 percent to 3.61 percent, reflecting rising prices. The 30-year gold yield rose 0.06 percent to 3.74 percent, close to the level last seen before the “mini” budget announced by former UK Prime Minister Liz Truss in late September. was found

Sterling increased by 0.9 percent to 1.157 dollars against the dollar and by 0.25 percent to 1.153 euros against the euro. One euro bought 86.5.

Shares in Asia did well, with gains in Japan, Hong Kong and China on Wednesday.


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