US stock indices closed lower on Wednesday (Oct 30) as chip stocks tumbled and investors awaited a host of corporate earnings.
Microsoft and Meta Platforms reported earnings after the bell, with both beating quarterly revenue estimates.
Shares of Alphabet, the first of the five “Magnificent Seven” megacap stocks that reported results this week, rose 2.8 per cent after the company on Tuesday beat expectations for third-quarter revenue and profit.
Alphabet helped to offset falling chip stocks, weighed by dour forecasts from Advanced Micro Devices and Qorvo, which fell 10.6 per cent and 27.3 per cent, respectively.
Meanwhile, shares of Super Micro Computer plunged 32.6 per cent after Ernst & Young resigned as the company’s accountant. Nvidia slipped 1.4 per cent.
The information technology sector was the biggest sectoral decliner, falling 1.3 per cent, while Alphabet’s gains lifted the communication services sector.
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“Qorvo, Advanced Micro and Super Micro – those are three pretty big moves that are causing a little bit of angst and taking some of the bloom off the rose from the stellar print from Google last night,” said Michael James, managing director of equity trading at Wedbush Securities.
“The clear laser focus is going to be on the stock specific reports and guides,” James said.
The Dow Jones Industrial Average fell 91.51 points or 0.2 per cent to 42,141.54, the S&P 500 lost 19.25 points or 0.3 per cent to 5,813.67 and the Nasdaq Composite lost 104.82 points or 0.6 per cent to 18,607.93.
In economic data, US gross domestic product increased at a 2.8 per cent annualised rate, according to the Commerce Department’s advance estimate of third-quarter GDP, slightly below economists’ forecast of 3 per cent growth.
A separate report showed US private payrolls growth surged by a higher-than-expected 233,000 jobs in October.
The neck-and-neck race between US presidential candidates Kamala Harris and Donald Trump was also at the top of investors’ minds ahead of the Nov 5 election.
Eli Lilly fell 6.2 per cent after missing sales estimates for its popular weight-loss and diabetes drugs.
Starbucks reported earnings after the close showing a drop in quarterly sales as global demand suffers.
Advancing issues outnumbered decliners by a 1.01-to-1 ratio on the NYSE. There were 210 new highs and 52 new lows on the NYSE.
The S&P 500 posted 24 new 52-week highs and five new lows, while the Nasdaq Composite recorded 126 new highs and 98 new lows. REUTERS
