The technology sector experienced widespread sell-offs ahead of the opening bell as software firms and chipmakers followed Alphabet's double-digit decline. Alphabet sank 10.5 percent on disappointing search advertising revenue and mounting cash burn, while Microsoft managed a 3.5 percent gain. Additional pressure hit cybersecurity and cloud peers after Fortinet plunged 25.4 percent and ServiceNow missed profit expectations. Meanwhile, macroeconomic caution persists as traders brace for fresh GDP and inflation data following the Federal Reserve's recent rate pause.
Key points
Diverging quarterly results from mega-cap tech leaders are testing investor patience rega…: Diverging quarterly results from mega-cap tech leaders are testing investor patience regarding the profitability of expensive artificial intelligence investments.
Software and semiconductor sectors face broad premarket pressure as investors await after…: Software and semiconductor sectors face broad premarket pressure as investors await after-hours earnings releases from Amazon and Intel.
Financial markets are pricing an 81 percent probability of a Federal Reserve rate increas…: Financial markets are pricing an 81 percent probability of a Federal Reserve rate increase in December ahead of incoming inflation and GDP data.
Sources checked by our analysis pipeline: 1
Oct 29 : Nasdaq futures dropped on Thursday as mixed earnings from Alphabet and Microsoft left investors weighing the payoff from heavy AI spending, with focus also on an inflation reading a day after the Federal Reserve left interest rates unchanged.
Alphabet slid 10.5 per cent in premarket trading after the company reported disappointing results in the core business of search advertising and a massive acceleration in cash burn as it poured resources into building out AI.
"Investors are starting to scrutinize monetization timelines versus the capital expenditure burn rates. Some investors are no longer giving all hyperscalers a 'free pass' to spend without limit," said Jeremy Saltzberg, VP and senior investment officer at Check Capital Management.
On the other hand, Microsoft climbed 3.5 per cent after the company delivered a big cash-flow beat and forecast strong cloud growth, offering fresh evidence that its hefty AI bets were working.
Other early movers included cybersecurity firm Fortinet, which tumbled 25.4 per cent after reporting third-quarter results. Software maker ServiceNow dropped 19 per cent after missing third-quarter profit estimates.
Palantir stock is climbing today, drawing attention to the factors behind its upward movement. The specific catalysts and reasons driving the stock's gains have not been detailed
Indian regulators are reviewing compliance costs compared to peer economies to prevent global capital from bypassing the country for alternative destinations. SEBI plans to issue a consultation paper aimed at aligning domestic regulations with international standards while safeguarding market integrity. These combined regulatory efforts seek to deepen local capital markets to meet expanding domestic financing needs.