A turbulent session was experienced on Thursday as disappointing earnings from major technology companies and renewed inflation concerns weighed heavily on investor sentiment. The S&P 500 suffered a sharp decline, while the Nasdaq Composite also dropped, marking both indexes’ steepest one-day losses since early September. The Dow Jones also fell significantly amid a broad market sell-off. Mixed economic data, alongside a highly anticipated Federal Reserve meeting and the upcoming US presidential election, further caused market uncertainty.

Key Takeaways:

  • S&P 500 and Nasdaq Post Largest One-Day Losses Since September: The S&P 500 fell sharply by 1.86%, closing at 5,705.45, while the Nasdaq Composite dropped 2.76% to end at 18,095.15. Both indexes suffered their largest single-day declines since September 3, driven by weaker-than-expected earnings reports from major tech players.
  • Dow Declines Amid Broad Market Sell-Off: The Dow Jones Industrial Average shed 378.08 points, or 0.9%, to close at 41,763.46. This loss was largely reflective of investor anxiety over a mixed bag of economic data, rising inflation, and upcoming Federal Reserve decisions on interest rates. With the US presidential election looming, the Dow capped off a choppy October, during which it fell 1.3% overall.
  • Tech Giants Microsoft, Meta, Apple, and Amazon Deliver Mixed Earnings: Microsoft and Meta led tech declines, with Microsoft shares slipping 6% after its revenue guidance disappointed, despite an earnings beat. Meta dropped over 4% as the company fell short of user growth expectations and projected a significant rise in capital expenditures for 2025. Meanwhile, Apple and Amazon provided a mixed picture. Apple reported stronger-than-expected revenue and earnings per share, although net income took a hit due to a European tax charge. Amazon posted impressive growth, especially in its cloud computing sector, with Amazon Web Services sales up 19% year-over-year, boosting its stock in after-hours trading.
  • Treasury Yields Hold Steady Ahead of Jobs Report: US Treasury yields remained largely unchanged as investors digested recent economic data. The 10-year Treasury yield edged up by about 1 basis point to 4.278%, while the 2-year Treasury yield hovered at 4.156%. These figures come as markets await Friday’s job report, which could provide further insight into labour market conditions and influence the Federal Reserve’s upcoming interest rate decision.
  • European Markets End October with Largest Monthly Loss in a Year: European stocks ended October with steep declines, reflecting investor concerns over inflation and recent economic data. The pan-European Stoxx 600 closed down 1.2% on Thursday, bringing its monthly losses to 3.4%—the worst monthly performance since October 2023. In the UK, the FTSE 100 slipped 126.85 points, or 1.54% for the month, finishing at 8,110.10. The CAC 40 in France fell 1.05%, while Germany’s DAX declined by 0.93%, weighed down by inflation worries and mixed reactions to the recent UK budget. UK housebuilders saw significant declines after the budget announcement, as concerns over rising government bond yields and unclear sector policies hit investor sentiment.
  • Asian Markets Slip as Bank of Japan Holds Rates, China Shows Manufacturing Recovery: Asia-Pacific markets struggled as investors awaited the Bank of Japan’s rate decision and reviewed China’s latest manufacturing data. The Bank of Japan maintained its policy rate at 0.25%, leading Japan’s Nikkei 225 to fall 0.5% to 39,081.25, snapping a three-day winning streak. Meanwhile, China’s manufacturing PMI edged into expansion territory, reaching 50.1, the first sign of growth since April. In Hong Kong, the Hang Seng climbed 0.13%, while South Korea’s Kospi led regional losses, down 1.45% to 2,556.15, reflecting weak earnings from Samsung Electronics.
  • Oil Prices Climb on Potential OPEC Production Delay: US crude oil prices rose 0.95% to close at $69.26 per barrel, while Brent crude gained 0.84%, finishing at $73.16 per barrel. This uptick followed reports that OPEC may delay its planned December production increase due to concerns over a potential supply-demand imbalance. In the US, gasoline inventories fell by 2.7 million barrels last week, signalling higher demand, which added further support to oil prices despite a turbulent global economic outlook.

FX Today:

  • EUR/USD Attempts Short-Term Recovery Amid Inflation Data: EUR/USD traded near 1.0876 as the pair attempted a modest rebound on Thursday. Resistance is found at the 50-period SMA around 1.0851 and the 100-period SMA at 1.0855, both of which could limit further gains. A more sustained bullish outlook would require a move above the 200-period SMA at 1.0977. On the downside, failure to maintain support above 1.0851 may lead to a retest of the 1.0800 level, with further declines potentially targeting 1.0750.
  • GBP/USD Struggles Amid Persistent Downtrend: GBP/USD traded around 1.2893, under pressure as it remained below key moving averages. The 50-period SMA at 1.2969 and the 100-period SMA at 1.3007 are acting as significant resistance points. For any bullish shift, GBP/USD would need to reclaim the 50-period SMA, opening potential upside towards the 1.3007 level. If sellers continue to dominate, support is anticipated at 1.2850, with a possible extension toward 1.2800 should selling pressure intensify.
  • AUD/USD Seeks Stability but Faces Selling Pressure: AUD/USD traded around 0.6580, showing signs of stabilisation amid a prevailing downtrend. The 50-period SMA at 0.6613 serves as immediate resistance, followed by the 100-period SMA at 0.6662 and the 200-period SMA at 0.6745. A break above 0.6613 could indicate a potential bullish reversal; however, continued resistance may push the pair toward support levels at 0.6550 and 0.6500.
  • Gold Dips on Profit-Taking, Approaches Key Support: Gold prices fell by around 1.5% recently, hovering near $2,745. Amid profit-taking, the precious metal is testing its 50-period SMA at $2,746, signalling a potential pause after a sustained rally. If gold breaks below this level, further declines may target the 100-period SMA near $2,705, with additional support around $2,668 at the 200-period SMA. Conversely, a hold above $2,746 could see prices rebound toward resistance at $2,750, aiming higher at $2,800 if buying interest picks up. 

Market Movers:

  • Carvana Soars on Earnings Beat and Upgraded Guidance: Carvana’s stock jumped 19% following a third-quarter earnings and revenue beat. The used car platform announced that its full-year adjusted EBITDA would exceed the high end of its previous target range, driving optimism among investors for a stronger financial outlook.
  • Etsy Climbs as Revenue and EBITDA Beat Estimates: Etsy shares increased by 7% after reporting third-quarter results that beat expectations. The e-commerce platform posted adjusted EBITDA of $183.6 million on revenue of $662.4 million, higher than the expected EBITDA of $177.4 million and revenue of $652.5 million, indicating solid growth in its marketplace operations.
  • eBay Drops on Weak Fourth-Quarter Forecast: eBay’s stock fell 8% after issuing lower-than-expected guidance for the fourth quarter. The online marketplace projected revenue between $2.53 billion and $2.59 billion, below analysts’ expectations of $2.65 billion. However, eBay posted a third-quarter earnings and revenue beat, which was overshadowed by the cautious outlook.
  • Coinbase Plummets After Earnings Miss: Shares of Coinbase dropped 15% as the cryptocurrency exchange missed third-quarter revenue expectations. Coinbase reported revenue of $1.21 billion, falling short of the anticipated $1.26 billion, indicating challenges in the crypto market amid a volatile trading environment.
  • Uber Declines on Missed Gross Bookings Target: Uber’s stock fell over 9% after the company reported third-quarter gross bookings of $40.97 billion, missing analysts’ forecast of $41.25 billion. The shortfall in bookings, despite a strong revenue performance, raised concerns about the pace of growth in Uber’s core ride-hailing business.
  • MGM Resorts Slips on Weak Earnings: MGM Resorts shares fell 11% following disappointing third-quarter results. The casino operator reported adjusted earnings of 54 cents per share, down from 64 cents a year ago, and missed revenue expectations with $4.18 billion, slightly below the forecasted $4.21 billion, reflecting a challenging environment in the gaming industry.
  • Super Micro Computer Continues Slide as Auditor Resigns: Super Micro Computer’s stock slumped an additional 12%, following a previous day’s 33% decline, after the company announced that Ernst & Young had resigned as its auditor. This development fuelled investor concerns about the company’s financial reporting stability.
  • Robinhood Drops on Revenue Miss and Lower Earnings: Robinhood’s stock declined 17% after the brokerage firm reported third-quarter earnings of 17 cents per share, below analyst expectations of 18 cents. Revenue also came in lower at $637 million compared to the anticipated $658 million, with company officials citing marketing costs as a key factor impacting revenue.
  • Estee Lauder Plummets as Forecast is Withdrawn: Estee Lauder shares plunged 21% after the luxury cosmetics company withdrew its annual financial forecast. The company pointed to continued weak demand in China and slashed its quarterly dividend, causing a sell-off in the stock as investors reassessed its growth prospects in key markets.

As a new month looms, US markets remain under pressure amid disappointing tech earnings, persistent inflation concerns, and mixed economic indicators. The S&P 500 and Nasdaq endured their sharpest single-day losses in over a month, driven by weaker-than-expected results from major technology companies and a cautious outlook on consumer spending. European markets struggled, ending October with their largest monthly decline in a year, while Asian markets grappled with mixed data from the Bank of Japan and a hesitant recovery in China’s manufacturing sector. With the Federal Reserve’s upcoming policy meeting and crucial employment data on the horizon, investors remain cautious, balancing hopes of economic resilience against fears from inflationary pressures and an approaching US presidential election.