October 27, 2022
Negative trading records from Alphabet and Microsoft have heightened fears of a global recession, derailing a jump in stock markets on Wednesday as they set the stage for results from other megacap technology heavyweights.
In early trading, stocks fell about 8% and the Nasdaq fell nearly 2%, highlighting the impact of a strong dollar and weak demand on the technology sector in the face of high inflation and rising borrowing costs.
Ahead of Thursday’s results, Meta fell 4%, reflecting soft results from Google search, while weakness from YouTube and Snap suggested that macro and ad targeting challenges persisted in the third quarter.
Amazon fell 4%, while Apple fell 1%. Netflix, Meta, Amazon, Microsoft, Alphabet and Apple have all lost more than $2.5 trillion in market value this year and should lose another $330 billion.
Meanwhile, concerns have been raised about Amazon’s cloud business as growth has slowed at Azure, Microsoft’s cloud platform and one of its most successful companies.
While most big tech stocks have risen in recent weeks, it has been a dismal year for the sector, which has lost 15% to 60% of its value. Alphabet also missed Wall Street’s third-quarter revenue growth target as ad sales remained weak, while Microsoft posted its slowest growth in five years due to inflation and a strong dollar.
The sources for this piece include an article in Reuters.
